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Table of Contents Using Quicken for Farm Financial Records .................................................................................. 1

Glossary of Quicken Terms....................................................................................................... 2 Glossary of Financial Terms ..................................................................................................... 2 Introduction to Quick keys, keyboard shortcuts, and desktop set up ........................................ 4 Setting up a file.......................................................................................................................... 6 Setting up accounts.................................................................................................................... 9 Importing a farm income and expense category list................................................................ 18 Setting up new categories & deleting unnecessary ones ......................................................... 19 Setting up subcategories for reporting purposes ..................................................................... 21 Setting up classes so enterprise reports can be generated ....................................................... 22 Entering transactions data using the categories, subcategories, & classes specified .............. 23 Recording loan payments ........................................................................................................ 27 Creating reports to summarize the data you have entered....................................................... 28 Viewing a graph of your income & expenses ......................................................................... 32

Backing up your data .............................................................................................................. 34

Category Lists .............................................................................................................................. 36 Standard .................................................................................................................................. 36 Married, Children, and Homeowner ....................................................................................... 37 Business .................................................................................................................................. 38 Farm ........................................................................................................................................ 39 Check Register Transaction Report ............................................................................................. 40 Reports: ........................................................................................................................................ 41 Cash Flow ............................................................................................................................... 41 Cash Flow by Month............................................................................................................... 43 Cash Flow by Enterprise......................................................................................................... 45 Transactions Summary............................................................................................................ 47 Tax Schedule, All Transactions .............................................................................................. 48 Tax Schedule, Totals Only...................................................................................................... 53 Reconciling the Bank Statement.................................................................................................. 54 Bank Statement ....................................................................................................................... 59 Using the Budget Features in Quicken ........................................................................................ 60 Monthly Budget Report .......................................................................................................... 65

Using Quicken for Financial Planning......................................................................................... 67 Retirement Calculator ............................................................................................................. 67 College Calculator .................................................................................................................. 69 Refinance Calculator............................................................................................................... 70 Investment Savings Calculator ............................................................................................... 71 Loan Calculator....................................................................................................................... 72 Various Topics:............................................................................................................................ 74 Line of Credit/Credit Card Accounts and Alerts .................................................................... 74 Saving and Locating Information for 1099s ........................................................................... 76 Recording Futures Market Transactions................................................................................. 78 Scheduled Transactions .......................................................................................................... 80 Writing Checks with Quicken................................................................................................. 81 Year End Copy: Archive vs. Start New Year ......................................................................... 82 Category Clean-up .................................................................................................................. 84 Retrieving a Deleted Quicken File.......................................................................................... 85 Please visit our website, http://www.agecon.okstate.edu/quicken/, to access the following topics and instructions: Password Security Transaction Reports Project/Job Reports Show Cash Flow by Enterprise Getting Rich Slowly Becoming Fiscally Fit

Home Inventory Quicken Home Inventory Quicken Address Book Recording Paycheck Information Investments

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Using Quicken for Farm/Ranch Financial Records (DELUXE 2003 for Windows 95 and later versions) Damona Doye, OSU Extension Economist1 November 2002 This will be a "hands on" session to develop a simple set of financial records and reports for a case farm with a cow/calf herd and wheat for grain and pasture. Although our case farm is a simple one, you will be able to practice many of the steps that you might use in adapting Quicken2 to keep records on your farm or ranch. These instructions are also a reference that can be used when working on computerized personal records at home. An overview of what we do in a workshop follows: 1. Introduce Quick keys, keyboard shortcuts, and desktop setup. 2. Set up a file. 3. Create accounts (checking, savings, and liability) to be used in the file. 4. Import a farm income and expense category list (categories to match Schedule F) into the file. 5. Set up new categories needed and delete unnecessary ones. 6. Set up subcategories for reporting purposes (e.g., 18-46-0 and lime in the Fertilizer & Lime

category). 7. Set up classes so that enterprise reports can be developed. 8. Enter transaction data using the categories and classes specified. 9. Record a loan payment. 10. Create reports to summarize the data entered. 11. View a graph of income and expenses. 12. Back up your data. Specific instructions for accomplishing each of these steps follow the glossary of financial and Quicken terms. When you are required to either choose a button or menu item or type a response, the instructions are in bold type. If you are using these instructions at home, the new user setup in Quicken will prompt you to set up a file and your accounts, as we will do in the first three sections of the instructions.

1 Additional assistance from Lori J. Shipman, Extension Associate, and Derrick Davies, Student Extension Assistant. 2 Quicken is a registered trademark and will be written as “Quicken” or “Quicken 2003” throughout the rest of this notebook.

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Glossary of Quicken Terms Account: Several types of accounts can be contained in a given file: checking, savings, credit card, cash, investment, asset (items you own and their value) and liability (the amounts owed). Accounts are a way to track your transactions as you do with checking account statements and credit card statements. Category: Categories allow you to set up a system much like a chart of accounts in accounting. Using categories is a way to separate income and expenses so that you can track how your money is being made and spent. Examples of categories are Salary, Interest earned, Feed and Clothing. Class: For farmers/ranchers, using classes allows tracking of income and expenses by enterprise. For example, you may use classes to differentiate between costs for Wheat, Cow-calf, Stockers, and Alfalfa. File: In Quicken, the computer file holds all of the information from multiple accounts and transaction details in one collection. The file acts like a file cabinet full of the entered financial information. Information is saved to the Quicken file instantly when you record transactions. Make a backup of your file often to help insure that information is not lost due to computer failure.

Glossary of Financial Terms

Amortize: (Amortization Schedule) An amortization schedule shows the split for interest and principal paid in regular payments over the life of the loan. Interest is paid along with the principal, with the interest being paid more rapidly at the beginning of the repayment of the loan. As the principal balance decreases, more of the payment goes toward principal and less toward interest. Cleared transaction: Transactions that have been processed (posted) by the financial institution are cleared. Your statement from the bank or financial institution lists the cleared transactions. In Quicken, cleared transactions are marked in the register under the Clr column with a “c”. Credit: Credit is a means of purchasing now and repaying in installments. In addition to repaying the money borrowed, you may pay interest as well as fees for establishing a loan. Examples of credit are credit cards, personal loans, home mortgages, etc. Compounding interest: This is the process by which the interest earnings on an investment are combined with the deposited money for future interest income calculations. Thus, money is accumulated faster due to compounding. Likewise, compounded interest on credit increases the balance owed because interest is charged on the balance and interest charges that have not been paid. Deposit: A transaction for which money is placed into an account. Deposits add to your account balance. Expense: Expenses are those transactions where money passes from you to another person, business or organization. Expenses reduce your account balance. Keeping track of expenses will help you to evaluate where your money goes.

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Income: Income is money you collect from someone else. Income increases the amount of money available to you. Income can be earned (for example, wages) or unearned (for example, gifts or interest income). Inflation: Inflation is the rise in the price of products and services over time. Inflation occurs when the supplies decrease and demand increases. Inflation is anticipated with economic growth. In general, the amount of money it takes to today to buy products will not be enough to buy the same products in the next few years. You must plan for inflation (historically about 3%) to meet or exceed future costs. Interest: Interest is a fee that you pay for borrowing money on credit. The interest rate (percentage) is determined when the loan is made. Some interest rates are “fixed” which means one rate is charged for the length of the loan. “Variable rate” loans have an interest rate that changes on a periodic basis to reflect changes in the interest base rates. Interest is paid along with the principal, in repaying loans. Memo: The memo field in the check register is a place to record information that is important about the transaction. This is an area to record invoice numbers or a description of the purchase or income. For your projects, you may wish to record mowing patterns, name of the customer, hours spent, etc. Payee: The person, organization, or business that is to receive payment is the payee. When you write a check to a store, write the name of the store in the payee blank. The payee field for a deposit can list the source of the money. Principal: The amount of money borrowed for a purchase or improvement is the principal. Additional fees or interest are based on the principal amount loaned. Reconcile: This is the process of matching your records against the statement that you receive from a financial institution or service, and making them come into agreement. Quicken has a reconcile feature that make reconciling your account easier. In the register, a reconciled transaction appears as an “R” in the Clr column. Reports: Reports are a way to organize information to show how your money is being spent and earned. A cash flow report shows the inflows and outflows of cash as a total, on a monthly or quarterly basis. A transaction report shows the transactions that have occurred. Tax-related categories: For those that earn enough income to file a tax return, this is a way to help summarize information for the income and expense categories that are related to tax reporting. In addition, you can select the appropriate tax form or schedule (such as Schedule F for farm income and expenses or Schedule C for business) so that a report can be generated that lists transactions by schedule or form. Transaction: A transaction is the record for the change in the value of an account. Examples are a purchase using a check, the transfer of money from checking to savings, or a deposit of cash into savings. Transfer: A transfer occurs when money is moved from one account to another. If you move cash from a checking account to your savings account, you have made a transfer. Uncleared (outstanding) transactions: Uncleared is the term used in Quicken for outstanding checks or deposits. Uncleared transactions are those that have been performed (check written or deposit made); however, they have not been processed and cleared through your account at the financial institution.

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1. Introduction to Quick keys, keyboard shortcuts, and desktop setup You may choose an item from Quicken menus in one of three ways:

• pressing <Alt> and the letter key underlined in the menu line • using the mouse, click on specialized "buttons" in the toolbar • using the mouse, move the cursor to the appropriate line in a drop-down menu and

click using the left button.

Note: Keyboard shortcuts are different than previous versions.

Within Quicken, when you have responded to a request for data or selected the menu item that you want, press <Tab> to move forward to the next field. Press <Shift><Tab> to move backwards one field. The step-by-step instructions that follow will not note every <Tab> needed to move through screens. The Quicken desktop setup has changed from that of previous versions. Desktop navigation options are as follows:

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1. Using the mouse, move the cursor to the appropriate item in the drop-down menu bar and click using the left button.

2. Toolbar buttons provide quick access to options such as returning to the previous screen

(back), accessing the Internet for stock quotes and news or the Quicken.com website. A button can be added to the toolbar by clicking on the “Customize” button in the toolbar or by choosing:

Edit Customize Tool Bar

From the “Add to tool bar” list on the left, select the button you wish to add to the toolbar and click on Add. To remove icons from the toolbar, select the commands you want to remove from the “Current tool bar order” list on the right and click on Remove. When you are finished, click on OK.

3. The Account Bar allows easy access to accounts by center. The “centers” display account

summary information in one easy-to-read place. You can customize what appears on the Cash Flow Center by deleting, rearranging, or adding new components. You can also create different views of the center. When an account is opened, the account register occupies the desktop.

4. Every major area of personal finance has its own QuickTab. When you open a new feature,

Quicken places a feature tab under the appropriate area, giving you one-click access to the features you use most.

When you become more familiar with Quicken 2003, you may want to try using these features, but for now, we will use the drop-down menu bar for navigation. Later in this tutorial, we will use the sample files provided on the diskette to review some of Quicken’s features. In order for these files to run efficiently, we will copy them to the hard drive of your computer. Place the disk labeled Quicken Sample Files into your computer’s floppy drive. Open the Windows Explorer program (the icon has a folder and magnifying glass) located in the Programs menu of your computer (it may be listed under Accessories). From the options on the left, select: My Computer 3 1/2 Floppy (A:) File names ASSETACCT, FARM CATEGORIES, and LOND03 should be displayed. From the taskbar at the top of the program, select: Edit

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Select All (or Ctrl+A) Then Edit Copy (or Ctrl+C) Now, select C: from the menu on the left. From the menu bar click File New Folder Name the folder Workshop Files. Open the new folder by double-clicking on it, then select Edit Paste (or Ctrl+V) 2. Setting up a file Just as a file cabinet can contain both family and farm financial information, one Quicken file can contain all the information about the farm and family finances, with income and expenses recorded in different accounts (checking, credit card, etc.). Reports can be developed for all accounts, by individual account, or by enterprise if you specify classes when you enter transactions. This tutorial will familiarize you with the basic functions you may use in Quicken. Click on the Quicken icon to open the Quicken program (on OSU portable computers, it will be the Quicken Deluxe 2003 icon) then choose:

File New (An additional screen Creating new file: Are you sure? may appear.)

If so, click on:

• New Quicken File OK (or press <Enter>).

Save in: (Select the directory in which you want to save the new file.)

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Type in a file name. File name: YourName Click on OK to create the Quicken file.

Note: If you get a message about Product Registration, click on Cancel and do it at your convenience later.

Quicken will help guide you through the additional setup steps.

You may choose to view an introductory video. We will skip over this step, however.

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Click on Next Step and answer the questions about yourself.

Answering these questions will help Quicken develop the default categories to be included in your category list. Some of these include standard categories, categories for married people, categories for those with children, categories for homeowners, and categories for use with a small business. The lists selected are merged. When completed, click on Next Step. Set Your Goals You will now be able to choose what you want Quicken to do for you. Mark those items that you would like Quicken to help you track. In order to get the most out of using Quicken, you may choose to select all options. This is recommended for farm users.

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Once you have selected all options, click Next Step. 3. Setting up accounts (checking, savings, cash, and liabilities) You will now be able to set up accounts for this file. This would be a good time to sketch out a list of the accounts you might want to set up for your farm and home. Cash Flow Cash Flow account choices include checking, savings, credit card, and cash accounts. To add a specific account, simply click on the “Add Account” button next to the account type. A description of each account type is detailed on the screen. If you would like to add another account later, you can easily do so. We will first add a checking account. Click Add Account next to Checking.

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We will later use this checking account to practice entering transactions (cash payments and deposits) for the farm. Remember to use <Tab> to move forward. Enter the following information into the screen:

Checking Account Setup Enter a name and financial institution for this account. Account Name: Checking Financial Institution: 1st National Bank Description (optional): (You can add a description if you so choose.)

Click on Next In the next screen, click on the “Or tell Quicken to use the name you entered” button to add your new financial institution.

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Click on Next Note: If at all possible, use a bank statement to establish a beginning balance as it will give you an accurate start and make reconciliation easier.

Enter the ending date on the statement. Statement Date: 1/3/03 Enter the ending balance on the statement. Ending Balance: 1241.35 Done You will notice that your new checking account now appears in the spending and Savings Accounts list and Cash Flow Center. Let’s continue setting up accounts. Click the Spending and Savings Add Account. Savings Account Setup Enter a name and financial institution for this account.

Account Name: Savings Financial Institution: 1st National Bank

Description (optional): (You can add a description if you choose to.) Click on Next

Quicken doesn’t recognize this financial institution Again, click on the “Or tell Quicken to use the name you entered” button to add your financial institution. Click on Next

Enter the ending date on the statement. Statement Date: 1/8/03 Enter the ending balance on the statement. Ending Balance: 5218.43 Done

Now, add a cash account to the Spending and Savings Account list with a beginning balance of $200.

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Click on Cash Add Account. Cash Account Setup Enter a name and optional description for this account. Account Name: Cash Account Description (for your own use): (You can add a description if you so choose.) Next Enter the date you want to start with: As of date: 1/1/03 Enter how much cash you have: Amount: 200.00 Done You should now see a listing of Spending and Savings accounts and their respective balances. Click on Next Step Investments We will bypass the Investments section for now. If you would like more information on how to setup and manage your investment accounts, please refer to the “Investments” instructions. Click on Next Step Property and Debt In this section, we suggest users evaluate the need to use Quicken to track net worth. If this is not your intent, then only record loans using the liability account. Otherwise, use the appropriate asset/debt account that suits your purpose, and be sure to update asset values, if using market value. If tracking assets for cost basis, use purchase price as the balance less adjustments for depreciation. For our purposes, we will record only liability accounts. The Londons have two loans outstanding on January 1, 2003: a pickup loan for $1,455 and a land loan for $73,126.01. The pickup loan will be paid off this year so we will not amortize it. The land note at origination was for $94,936 to be repaid over 15 years at 10.5% interest with annual payments (9 years of payments remain). To set up the Liability account, click Add Account to the right of the Liability label.

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Click on Next Enter the starting date and balance from your statement if you have it As of Date: 1/1/03 Balance Due: 1455.00 Click on Done Quicken 2003 for Windows Would you like to set up an amortized loan to be associated with this account? No (We will not amortize this loan as it will be paid off in a year.) We will now set up the land loan. From the “property and debt accounts” screen, select: Add Account (to the right of the Liability label) Enter the following information on the first screen.

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Click on Next Enter the ending date and balance from your statement, if you have it. As of date: 1/1/03 Balance Due: 73,126.01 Click on Done Quicken 2003 for Windows Would you like to set up an amortized loan to be associated with this account? Yes Click on the Summary tab (at the top of the window to the right of Easy Step) and enter the information in the following three screens:

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Click on Next

Click on Next

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Click on Done A message appears:

Quicken 2003 for Windows Quicken has estimated the amount of the next payment for this loan. Click “OK” here to return to View loans. Then click “Done” again to accept the estimate.

Click on OK and then click on Done. A Set Up Loan Payment screen appears to prompt you to specify details about the payment. Enter the additional information, being sure to leave the category for Interest blank. Once we have imported the Farm Categories later on, you will be instructed to enter the appropriate category when we make the payment.

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Click on OK If you see a prompt to use categories, click on No. A message appears:

Quicken 2003 for Windows A loan may have an associated asset. For example, the house is the asset, which is associated with the home loan.

Would you like to create an asset account to go along with this loan? No (Note: If you want to create a balance sheet in Quicken and have an asset account for each piece of property, you may want to respond yes. If you choose no, you can always add the information later. See the balance sheet instructions in the notebook for more information.)

The loan payment is now a memorized transaction. This means that the information for the check register and loan register can be recalled when the payment comes due. The loan payment requires a split transaction; that is, the principal paid is applied to the loan balance in the appropriate loan liability account, while interest paid is recorded in the check register as an interest expense. We will demonstrate a payment transaction later in the instructions. Once you have added all needed accounts, click on Next Step in the bottom right of the Property and Debt screen. Paychecks Paychecks can be tracked for deductions and such using Quicken 2003. Although we will not include that section here, you are free to explore it as you wish.

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Click on Next Step Bills You can also add recurring bills and payments to Quicken for scheduled transactions. We will discuss this more in depth later. Click on Next Step Setup Summary This screen allows you to look over all the things you have added to Quicken. Please take a few moments and review the data to make sure it is correct. If you find errors later on, it can be corrected. Click Done when you are ready to proceed. Click OK on the next screen, and you will be directed to the Quicken main page. 4. Importing a farm income and expense category list Spend some time thinking about the kinds of income and expenses that you want to track. In the beginning, you may want to start with categories that match those needed for tax reports or that match an existing chart of accounts or record system. Start simple and add new levels of detail as you need them for management purposes. A printed list of Quicken categories and descriptions built to match income tax Schedule F is included in your handouts (Farm Categories). This list can be imported into your Quicken file from a file named Farm Categories on the diskette you received with this notebook.

We will now import these farm income and expense categories to our current file to facilitate farm financial record keeping and develop the framework for Schedule F tax reports. The resulting category list will be a merger of the farm income and expense categories and the Quicken default category list(s) selected.

The Farm Categories file is in the C:\Workshop Files directory. From the main menu, choose:

File Import

QIF File Complete the import screen as follows:

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You may click on Browse to identify the Farm Categories file as one on the C:\Workshop Files directory. Category List should be the only item check marked. Use the mouse or space bar to check category list and uncheck the other items. OK Wait while categories are imported. A message that items have been successfully imported will appear. OK Click on Tools in the main menu line at the top of the window and choose Category List to verify that your category list now contains CCC Loans Forfeited, CCC Received, Coop Distributions, and other farm categories in addition to the original default list. Scroll through the list to become familiar with the names and descriptions of the categories. Close the category list by clicking on X in the upper right corner of the “Category List” window. 5. Setting up new categories and deleting unnecessary ones The farm income and expense category list (Farm Categories) provided to you on diskette is by no means sacred. It is intended to serve as a beginning point for your own personalized list. The category list is shared (accessible) across all accounts within your Quicken file. You may add to, delete, or modify the list to make it useful to you. As an example of how to add a category, let's say that you want to add a category for expenses associated with subscribing to an internet service provider. Access the category list by choosing: Tools (in the menu along the top of the screen) Category List Choose New (top left corner of the “Category List” window)

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Enter the following information:

Tax-related (this must be checked in order for it to show up in tax reports) Make sure the “Extended Line Item List” is selected so that Schedule F lines will be available. Tax Line Item:Schedule F:Other Farm expenses (Click on the down arrow at the

right and scroll down through the list until you find the appropriate line.)

OK The category has now been added, as you can see, if you scroll down to the expenses in the Category List on your screen. Don't worry about making mistakes in setting up categories—you may change information in categories at any time and all transactions will be immediately updated. If you need to make corrections, highlight the category name and click on Edit.

You can easily remove unused categories. Move the cursor to the Bonus (Bonus income) category. With the category name highlighted, you can delete by clicking on Delete in the top left of the “Category List” window.

A Delete Category screen will appear warning you that you are about to delete a category.

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Select Delete Category.

OK 6. Setting up subcategories for reporting purposes Setting up subcategories is similar to setting up categories. Let's say that we want to add a second level of detail to our fertilizer purchase records, for example, so that we can track 18-46-0 and lime individually rather than as one lump sum in the Fertilizer & Lime category. (Note: This is an example, not a recommendation for use. Only add subcategories if you plan to use the information to make decisions. Otherwise, you unnecessarily complicate record keeping.) Click on New (located in the “Category List” window) Fill in the following information:

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Note: If the subcategory has different tax attributes than the category, be careful to select the correct tax line. For example, if mortgage interest is the category, subcategories for farm mortgages and personal mortgages should be attached to different tax schedules.

OK Repeat the process used in developing a subcategory for 18-46-0 to add a subcategory for lime. Close the Category List by clicking on the X in the upper right corner of the “Category List” window. 7. Setting up classes so enterprise reports can be generated By using classes, you can add a second dimension to reports. We suggest using classes to sort income and expenses by enterprise. Then you will be able to print reports summarizing income and expenses for specific components of the farm operation, for example, the cow-calf, wheat, or alfalfa enterprise. When you imported the farm income and expense categories, several classes – Cow/Calf, Hay, Milo, Oats, Stocker, and Wheat -- were also imported. Let’s add an Alfalfa class. From the main menu, choose: Tools

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Class List (or press Ctrl+L) New (located in “Class List” window)

Set Up Class Name: Alfalfa Description: Copy Number (optional): (Used if you are filing multiple copies of a tax form.)

OK Repeat these steps to add any other classes needed. Recording a class along with a category for a transaction more fully documents how the income was earned or how the expense item was used. Close the “Class List” window by clicking on the X in the upper right corner of this window. 8. Entering transactions data using the categories, subcategories, and classes specified Payments, transfers, and deposits are generally referred to as transactions in Quicken. We will begin by entering payments and deposits in the checking account. Double click on Checking on the Account Bar. A register will appear and will list the opening balance for the account. The account name “Checking” is listed in the top center of the screen. If you are interested in removing the information about online banking from the check register or from any other account window, click on Options in the right corner of the window as indicated below and select Close.

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If you want to be able to later sort data by category and class, you must specify the category and class for each transaction. The "/" after the category name signals that a class name will follow. The format for labeling a transaction is Category:Subcategory/Class. Thus, at the Category prompt for a transaction involving the purchase of lime for the wheat enterprise, you could type Fertilizer & Lime:Lime/Wheat where Fertilizer & Lime is the Category, Nitrogen is a subcategory, and Wheat is the Class name. Here, the class is used to denote an enterprise for which cost and return information is of interest. To enter transactions, you will need the date, check number (if applicable), payee, payment/deposit amount, and category/class. You may also record a memo regarding the transaction if you want. Memos are useful for recording quantities, signaling the potential need for a 1099, and noting more detail about the transaction. To move from one field to another, use the <Tab> key. Practice a sample entry:

Date: 1/4/03 Num: 1001 Payee: Yukon John Deere Payment: 20 Category: Repairs and Maintenance/CowCalf Memo: Winch on pickup

Once you type in a letter, Quicken will try to complete the word by recalling from an internal list. Once enough distinguishing letters are typed to get the correct category name, you can type a ‘/’ (slash) and enter the first letter of the Class name. Again, once enough distinguishing letters are typed to get the right word, press <Tab> to move to the next field. When you have finished typing in the information, click the Enter button or press Ctrl+Enter. Often a transaction with a particular company or payee will include items that should be allocated to different categories and classes. In this case, you will split the transaction as needed. For instance, the Co-op bill might include fuel used in the Wheat enterprise as well as feed used in the CowCalf enterprise. First, enter the total amount of the check:

Date: 1/5/03 Num: 1002 (You can use the “+” key to increase the check number by one.) Payee: Klondike Co-op Payment: 421

Now, click on Split (at the right of the screen, or press Ctrl+S) and type in these responses:

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Click OK when finished entering information (this finishes the split), then click on Enter to record the transaction.

Use care with repeat transactions based on a split transaction. Sometimes you need a split transaction; sometimes you don’t. If you are writing a check to a business or individual for which the earlier check was split, Quicken assumes that you want to use the same format as before. Let’s say that you now want to enter a check to the Klondike Coop, which is for fertilizer only. When you type the name of the Coop and tab to the amount column, if the split transaction comes up, you can eliminate it by clicking on the red X to the right of “--Split--” in the category line and then clicking on Yes. Let’s practice this:

Date: 1/5/03 Num: 1003 Payee: Klondike Coop Payment: 355

Click on the red X near the middle of the screen (to the right of the word “--Split--” in the category cell)

Clear all split lines?

Yes

Category: Fertilizer & Lime:18-46-01/Wheat

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Enter

If you find that you generally prefer not to have a split for a specific business or individual, then memorize a transaction that does not include a split. Highlight a transaction with a single category/class, and press Ctrl+M, then OK or choose:

Edit (in the main menu) Transaction

Memorize Quicken 2003 for Windows This transaction is about to be memorized. OK

(Note: If the transaction you select to memorize was not the first one you entered to that payee, you will be asked if you want to replace the original transaction in the memorized list.)

Replace

If the categories and classes used with a payee change constantly, you may prefer to create a blank transaction with only the payee name and memorize it. Date: 1/1/03 Payee: WalMart Ctrl + M OK Another justification for memorizing a transaction that contains only the payee name is to prevent misallocations and negative amounts in split transactions. Periodically review your split transactions, particularly those where the amount allocated to different categories varies each time. Deposits, as well as checks written to places like WalMart or the co-op, are good candidates for mistakes. If you don’t clear all previous splits when you enter a new transaction, you can end up with unintended negative amounts in categories.

Now, to record a deposit.... Let’s say that our farmer had some hay in storage, and recently sold some to a neighbor, Paul Bunyan. Go to a blank line and enter:

Date: 1/11/03 Num: DEP (this will help ensure that your entry is made in the deposit column after you enter the payee name and <Tab>) Payee: Paul Bunyan Deposit: 800 (if you didn’t enter DEP in the Num column, be sure to <Tab> over twice so that the cursor is in the Deposit column!)

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Category: Raised Sales:OtherProducts/Alfalfa (Note that Other Products is a subcategory therefore, a

colon is used!) Memo: 8 tons hay

Enter Now begin entering the transactions for our farmer using the printed register (blue sheet) from the checking account. Begin at the top of the sheet and practice recording transactions until you feel comfortable with the process. 9. Recording Loan Payments Let's assume it is now August 2003 and time to record a payment on the amortized land loan. Choose Property & Debt Loans (or press Ctrl+H) If the Land Note is not the loan in view, click on Choose Loan and select it. Click on Make Payment. You are questioned, “Is this your regularly scheduled payment or an extra payment to this loan?” Click on Regular.

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We need to designate the category to record the interest. Click on Split. On the second line, enter Interest Expense:Farm Interest Mortgage.

OK Enter the check number, 2002. Once data is verified and modified as needed, choose OK. Close the window. You can view the amounts applied to principal and interest by returning to the land note payment line in the Checking register and looking at the splits: Highlight the Federal Land Bank transaction. Click on Split (at the bottom of the screen, or press Ctrl+S). You will see that Quicken has recorded the appropriate amounts to principal ($5,159.39 to the LandNote) and interest ($7,879.79 to Mortgage Interest:Farm). Click on OK to leave the split.

Now switch from the checking account to the Land Note account to see that the principal

payment has been applied to the outstanding balance of the loan. With the Federal Land Bank transaction highlighted, right-click (click on the right side of your mouse) and choose Go to Transfer (left-click) to switch to the Land Note account. You will see that a Balance Adjustment entry was made for earlier principal payments and that the principal portion of the payment from the checking account has been applied to the loan balance. (If you get a message that the transaction is not a transfer, you didn't record your payment earlier!) Right-click on the Federal Land Bank transaction and choose Go to Transfer to return to the Checking Account. Click on OK if the Split Transaction window appears on your screen. 10. Creating reports to summarize the data you have entered.

Let’s look at some sample reports that you might want to use in monitoring your financial performance: • cash flow summaries, including one by enterprise (which also gives the total); • a summary of payments made to a payee; • a tax schedule report; and a transactions journal.

Because you may have entered only a few transactions in your file, we will close the file with your name and open a sample file, LOND03.

29

Close the open windows then choose:

File Open

Choose: Open Quicken File

Look in: Local C:Workshop Files File name: LOND03

OK

Note: If using data from a previous version of Quicken, you will get a message that Quicken needs to upgrade your data. Click OK. If the file conversion fails, it may be because the backup of the old file requires too much disk space. Copying the file to the hard drive should solve the problem.

Click on: Reports (in the main menu line) Cash Flow Cash Flow Adjust the Report Dates: Report dates: Last Year From: 1/1/02 To: 12/31/02 Column: Don’t Subtotal (If creating the report in the Fall of 2002, choose Custom date instead of Last Year) Scroll through the report to view individual inflow and outflow items as well as totals using the arrow keys and PgUp or PgDn keys. A copy of the report is included in your workshop materials. The annual cash flow statement provides a summary of cash income and expenses for the year using the categories associated with individual transactions. The cash flow report documents sources and uses of funds and can be useful in developing budgets for future years. Now, let's say that you want to modify the cash flow report to show monthly cash flows. Choose Column near the middle of the Cash Flow window, and select Month. If you think you might want to use this same report again, you can memorize its features by clicking on Save Report.

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OK

Now, let's develop a cash flow report by enterprise. Click on Column and choose Class. You may want to change the title of the report. Click on Customize at right. Title: London Cash Flow by Enterprise Headings Row: Category Column: Class OK A report showing a summary of cash inflows and outflows by enterprise for last year appears on screen. Review it to see the cash generated and used by the cow-calf enterprise relative to the wheat enterprise and to note totals by category for family living expenses. You may memorize this report for future use by clicking on Save Report.

What if you wanted only a summary of payments made to the John Deere dealer during the year? Click on the Customize button.

Title: Deere Transactions Summary Click on Categories tab

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Matching (column at right)

Payee contains: Yukon John Deere (The spelling must be the same in all transactions or some matching transactions will not be found. You can select from the payee list by clicking on the arrow at the right.)

OK Unless you changed the report layout, you will now have a summary of expenses at the John Deere dealership by category and enterprise. Click on the X to close the window (or press <Esc> once) to leave the John Deere Transactions Summary.

Save will take you to the form for saving the report; don’t Save exits the report; and Cancel returns you to the report. This screen will appear when you close any report that hasn’t been saved, unless you check the “Don’t show me this again” box. All of the previous reports have been examples of cash flow statements. We will now switch to a different kind of report, the tax schedule report. When you begin gathering information to take to the accountant who prepares your taxes, remember the differences between the tax schedule and tax summary reports. Tax Schedule reports list all transactions (or splits of a transaction) assigned to a category that is attached to a specific tax form or schedule. Tax summary reports will include transactions with categories that have been noted as tax-related whether or not a specific tax schedule has been assigned.

32

Now, click on: Reports (in the main menu) Tax Tax Schedule Date Range: Last Year (if creating the report in the Fall of 2002, choose Custom date from 1/1/02 to 12/31/02 instead of Last Year)

As you will see, this report lists every transaction assigned to a category attached to a tax schedule. To prepare a report showing totals only (not individual transactions), choose: Customize Show (as circled in the center of the Customize Tax Schedule Report screen below) Totals Only OK You now have a summary of the information needed for tax reporting purposes by Schedule. In our example, the report begins with Schedule A items, including charitable contributions, and continues to Schedule F (farm income and expense items) and ends with a W-2 summary. 11. Viewing a graph of your income and expenses It's said that a picture is worth a thousand words. Quicken makes it easy for you to get a quick picture of income relative to expenses, as well as income and expense composition. Click on X in the report window to leave the report. Click on: Reports Cash Flow Income/Expense

33

Then click on the Graph tab at right Income/Expense Graph Date Range: Last Year Interval: Month

You will see a bar chart showing monthly income and expenses. Pretty neat, huh? To view a pie chart showing how money has been spent, choose Reports Cash Flow Spending Click on the Graph tab. Note that the 10 categories contributing the most to total expenses are charted with additional categories lumped into "other" in the bottom graph. As with the reports, you may memorize useful graphs. Click on:

34

Save report (located in the upper right hand corner of window) Report name: Expense Graph OK 12. Backing up your data Quicken automatically saves the data that you have entered in the file on which you have been working when you exit the program. However, you will want to regularly save a backup copy on a floppy disk as well. Since we copied the LOND03 file to the C: drive earlier and have been working from that file, we will backup our data on the A: drive. To back up your data, be sure your floppy disk is in Drive A: (use a new disk—not the disk that came with this manual) and complete the information as indicated on the following screen. You can utilize the browse buttons to select both the file you want to backup and the backup location. Select: File Backup (or press Ctrl+B)

Click on OK. You should receive a message that the file has been backed up successfully. Click on OK or press <Enter> again to continue. Now, select: File Exit (This closes the program.)

35

Note: At home, you will want to keep your farm records in Quicken on the hard drive (typically Drive C:) and store the backup file on a floppy disk. It would be wise to backup your information on multiple sets of disks. Alternate the disks that you use so that you minimize the potential loss of information.

CONGRATULATIONS! You have now completed the basic Quicken workshop for farm financial records! Hopefully, you will want to apply your newly learned skills to your own farming operation. Refer to these instructions and the Quicken manual for assistance in setting up your own record keeping system.

36

STANDARD Category List Page 1

Category Type Description Group Tax Tax Line Item Bonus Income Bonus Income Income T W-2:Salary or wages, self Div Income Income Dividend Income Income T Schedule B:Dividend income Gift Received Income Gift Received Income Interest Inc Income Interest Income Income T Schedule B:Interest income Invest Inc Income Investment Income Income T Other Inc Income Other Income Income T Form 1040:Other income, misc. Salary Income Salary Income Income T W-2:Salary or wages, self Tax Refund Income State/Local Tax Refund Income T 1099-G:State and local tax refunds Unemployment Inc Income Unemployment Compensation Income T 1099-G:Unemployment compensation Auto Expense Automobile Expenses Mandatory Expenses Fuel Sub Auto Fuel Mandatory Expenses Insurance Sub Auto Insurance Mandatory Expenses Loan Sub Auto Loan Mandatory Expenses Registration Sub Auto Registration Mandatory Expenses T Schedule A:Personal property taxes Service Sub Auto Service Mandatory Expenses Bank Charge Expense Bank Charge Mandatory Expenses Cash Expense Misc Cash Discretionary Charity Expense Charitable Donations - Cash Discretionary T Schedule A:Cash charity contributions Charity-Non Cash Expense Charitable Donations - Non Cash Discretionary T Schedule A:Non-cash charity contributions Clothing Expense Clothing Discretionary Computer Expense Computer Discretionary Dining Expense Dining Out Discretionary Education Expense Education Mandatory Expenses Entertainment Expense Entertainment Discretionary Gifts Given Expense Gift Expenses Discretionary Groceries Expense Groceries Mandatory Expenses Homeowner's Fees Expense Homeowner's Fees Mandatory Expenses Household Expense Household Misc. Exp Discretionary Insurance Expense Insurance Mandatory Expenses Disability Insurance Sub Disability Insurance Mandatory Expenses Home Insurance Sub Home Insurance Mandatory Expenses Life Insurance Sub Life Insurance Mandatory Expenses Interest Exp Expense Interest Expense Mandatory Expenses IRA Contrib Expense IRA Contribution Mandatory Expenses T Form 1040:IRA contribution, self Medical Expense Medical Expense Mandatory Expenses T Schedule A:Medicine and drugs Doctor Sub Doctors, Dentists, & Hospitals Mandatory Expenses T Schedule A:Doctors, dentists, hospitals Medicine Sub Prescriptions Mandatory Expenses T Schedule A:Medicine and drugs Misc Expense Miscellaneous Discretionary Personal Care Expense Personal Care Discretionary Recreation Expense Recreation Expense Discretionary Rent Expense Housing Rent Mandatory Expenses Subscriptions Expense Subscriptions Discretionary Tax Expense Taxes Mandatory Expenses T Fed Sub Federal Tax Mandatory Expenses T W-2:Federal tax withheld, self Medicare Sub Medicare Tax Mandatory Expenses T W-2:Medicare tax withheld, self Other Sub Misc. Taxes Mandatory Expenses T SDI Sub State Disability Insurance Mandatory Expenses T W-2:Local tax withheld, self Soc Sec Sub Soc Sec Tax Mandatory Expenses T W-2:Soc. Sec. tax withheld, self State Sub State Tax Mandatory Expenses T W-2:State tax withheld, self Utilities Expense Water, Gas, Electric Mandatory Expenses Cable TV Sub Cable TV Mandatory Expenses Garbage & Recycling Sub Garbage and Recycling Mandatory Expenses Gas & Electric Sub Gas and Electricity Mandatory Expenses Internet Sub Internet Mandatory Expenses Telephone Sub Telephone Expense Mandatory Expenses Water Sub Water Mandatory Expenses Vacation Expense Vacation expenses Discretionary Lodging Sub Motel/Hotel Costs Discretionary Travel Sub Transportation exp Discretionary

MARRIED Category List Page 1

Category Type Description Group Tax Tax Line Item Salary Spouse Income Spouse's Salary Income Income T W-2:Salary or wages, spouse IRA Contrib Spouse Expense Spouse's IRA Contribution Mandatory Expenses T Form 1040:IRA contribution, spouse

37

Tax Spouse Expense Spouse's Taxes Mandatory Expenses T Fed Sub Federal Tax Mandatory Expenses T W-2:Federal tax withheld, spouse Medicare Sub Medicare Tax Mandatory Expenses T W-2:Medicare tax withheld, spouse Other Sub Misc. Taxes Mandatory Expenses T SDI Sub State Disability Insurance Mandatory Expenses T W-2:Local tax withheld, spouse Soc Sec Sub Soc Sec Tax Mandatory Expenses T W-2:Soc. Sec. tax withheld, spouse State Sub State Tax Mandatory Expenses T W-2:State tax withheld, spouse

CHILDREN Category List Page 1

Category Type Description Group Tax Tax Line Item Childcare Expense Childcare Expense Mandatory Expenses T Form 2441:Qualifying childcare expenses

HOMEOWNER Category List Page 1

Category Type Description Group Tax Tax Line Item Home Repair Expense Home Repair & Maint. Mandatory Expenses Housing Expense Housing Mandatory Expenses Mortgage Int Expense Mortgage Interest Mandatory Expenses T Bank Sub Mortgage Interest - Bank Mandatory Expenses T Schedule A:Home mortgage interest (1098 Individual Sub Mortgage Interest - Individual Mandatory Expenses T Schedule A:Home mortgage int. (no 1098)

38

BUSINESS Category List Page 1

Category Type Description Group Tax Tax Line Item Consulting Income Consulting Income T Schedule C:Gross receipts or sales Finance Charge Income Finance Charge Income T Schedule C:Other business income Gr Sales Income Gross Sales T Schedule C:Gross receipts or sales Other Inc, Bus Income Other Business Income T Schedule C:Other business income Services Income Service Income T Schedule C:Gross receipts or sales Ads Expense Advertising T Schedule C:Advertising Bad Debt Expense Bad Debt Expense T Schedule C:Bad debts from sales/services Car Expense Car & Truck T Schedule C:Car and truck expenses Commission Expense Commissions T Schedule C:Commissions and fees Discounts Expense Discount Expense T Schedule C:Returns and allowances Dues and Subscriptions Expense Dues and Subscription Expense T Schedule C:Other business expenses Employee Benefit, Busin Expense Employee Benefit Programs T Schedule C:Employee benefit programs Insurance, Bus Expense Insurance (not health) T Schedule C:Insurance, other than health Int Paid Expense Interest Paid T Schedule C:Interest expense, other Late Fees Expense Late Payment Fees T Schedule C:Other business expenses Legal-Prof Fees Expense Legal & Prof. Fees T Schedule C:Legal and professional fees Licenses and Permits Expense License and Permits Expense T Schedule C:Taxes and licenses Meals & Entertn Expense Meals & Entertainment T Schedule C:Meals and entertainment Miscellaneous, Bus Expense Misc. Business Expense T Schedule C:Other business expenses Mortgage Interest, Busin Expense Mortgage Interest Paid T Schedule C:Interest expense, mortgage Office Expense Office Expenses T Schedule C:Office expenses Pension and Profit-Shari Expense Pension and Profit-Sharing Plans T Schedule C:Pension/profit sharing plans Postage and Delivery Expense Postage and Delivery Expense T Schedule C:Other business expenses Printing and Reproduction Expense Printing and Repro. Expense T Schedule C:Other business expenses Rent on Equip Expense Rent-Vehicle,mach,equip T Schedule C:Rent/lease vehicles, equip. Rent Paid Expense Rent Paid T Schedule C:Rent/lease other bus. prop. Repairs Expense Repairs T Schedule C:Repairs and maintenance Returns Expense Returns & Allowances T Schedule C:Returns and allowances Supplies, Bus Expense Supplies T Schedule C:Supplies (not from COGS) Tax, Business Expense Taxes & Licenses T Schedule C:Taxes and licenses Fed Sub Federal Tax T Schedule C:Taxes and licenses Local Sub Local Tax T Schedule C:Taxes and licenses Property Sub Property Tax T Schedule C:Taxes and licenses State Sub State Tax T Schedule C:Taxes and licenses Travel, Bus Expense Business Travel Expense T Schedule C:Travel Utilities, Bus Expense Water, Gas, Electric T Schedule C:Utilities Telephone, Bus Sub Telephone Expense T Schedule C:Utilities Wages Expense Wages & Job Credits T Schedule C:Wages paid

FARM Category List Page 1

Category Type Description Group Tax Tax Line Item CCC Loans Forfeited Income CCC Loans forft/repaid T Schedule F:CCC loans forfeited or repaid

39

CCC Received Income CCC loans received T Schedule F:CCC loans reported/election Coop Distributions Income Coop Distributions T Schedule F:Total co-op. distributions Crop Insurance Benefits Income Crop insur benefits,recd T Schedule F:Crop ins. proceeds received Crop Insurance Deferred P Income Crop ins. proceeds-defrd T Schedule F:Crop ins. proceeds deferred Custom Income Income Custom Hire Income T Schedule F:Custom hire income Government Payments Income Govt. program payments T Schedule F:Agricultural program payment Livestock Resale Income Resales of purch lvstk T Schedule F:Resales of livestock/items Stocker Steers Sub Stocker steers T Schedule F:Resales of livestock/items Other Farm Income Income Other farm income T Schedule F:Other farm income Raised Sales Income T Schedule F:Sales livestock/product raised Grain Sub Sale of raised grain T Schedule F:Sales livestock/product raised Livestock Sub Sale of raised lvstk T Schedule F:Sales livestock/product raised Other Products Sub Sale of Other Raised Prod T Schedule F:Sales livestock/product raised Auto Expense Automobile Expenses Farm Auto Sub Farm car & truck T Schedule F:Car and truck expenses Chemicals Expense Ag Chemicals T Schedule F:Chemicals Conservation Expense Conservation Expense T Schedule F:Conservation expenses Consultants Expense Consulting expense T Schedule F:Other farm expenses Custom Hire Expense Custom Hire Expense T Schedule F:Custom hire expenses Dues Expense Dues Farm Dues Sub Farm Dues Schedule F:Other farm expenses Employee Benefits Expense Employee Benefits T Schedule F:Employee benefit programs Feed Purchased Expense Feed purchased T Schedule F:Feed purchased Fertilizer & Lime Expense Fertilizer and lime T Schedule F:Fertilizers and lime Freight and Trucking Expense Freight T Schedule F:Freight and trucking Gas, Fuel, & Oil Expense Gas, fuel, oil T Schedule F:Gasoline, fuel, and oil Insurance Expense Insurance Farm Insurance Sub Insurance (not health) T Schedule F:Insurance, other than health Interest Expense Expense Interest Expense T Farm Interest Mortgage Sub Farm Mortgage Interest T Schedule F:Interest expense, mortgage Farm Interest Other Sub Farm interest (not mort.) T Schedule F:Interest expense, other Labor Hired Expense Labor hired T Schedule F:Labor hired Livestock Basis Expense Basis lvstk for resale T Schedule F:Cost of resale livestock/items Mortgage Interest Expense Mortgage Interest Exp T Schedule A:Home mortgage interest (1098 Office Expense Office Expenses T Schedule C:Office expenses Farm Office Sub Farm office expense T Schedule F:Other farm expenses Other Expenses Expense Other Expenses T Farm Expenses Other Sub Other farm expenses T Schedule F:Other farm expenses Rent Expense Farm Rent T Land Sub Land rental expenses T Schedule F:Rent/lease land, animals Livestock Sub Rent animals, misc. T Schedule F:Rent/lease land, animals Vehicles, Machinery, Eq Sub Rent vehic, mach, equip T Schedule F:Rent/lease vehicles, equip. Repairs and Maintenance Expense Repairs T Schedule F:Repairs and maintenance Seed and Plants Expense Seeds and plants purch T Schedule F:Seeds and plants purchased Semen Expense Semen & certificates T Schedule F:Vet, breeding, and medicine Storage and Warehousing Expense Storage & warehousing T Schedule F:Storage and warehousing Subscriptions Expense Subscriptions Farm Subscriptions Sub Farm subscriptions T Schedule F:Other farm expenses Supplies Expense Supplies T Schedule F:Supplies purchased Taxes Expense Taxes T Schedule C:Taxes and licenses Farm Property Taxes Sub Farm property taxes T Schedule F:Taxes Farm Taxes Other Sub Other farm taxes T Schedule F:Taxes Utilities Expense Water, Gas, Electric Farm Utilities Sub Farm utilities T Schedule F:Utilities Veterinary Expense Veterinary fees & med Schedule F:Vet, breeding, and medicine Breeding Fees Sub T Schedule F:Vet, breeding, and medicine Medicine Sub Livestock Medicine Schedule F:Vet, breeding, and medicine

Transaction 1/1/2003 Through 2/28/2003

11/20/2002 Page 1

Date Account Num Description Memo Category Clr Amount BALANCE 12/31/2002 -9,570.39 1/4/2003 Checking 1000 Southwestern Bell phone Telephone/Family Living R -76.10 1/4/2003 Checking 999 REC electric Utilities/Family Living R -88.11

40

1/5/2003 Checking S Julie London Salary/Family Living R 923.07 Taxes:Fed/Family Living R -87.00 Taxes:FICA/Family Living R -57.23 Taxes:State/Family Living R -25.85 Taxes:Other/Family Living R -13.38 1/15/2003 Checking 1006 St. Andrew Church Charity/Family Living R -30.00 1/15/2003 Checking 1005 Mastercard [Mastercard] R -495.56 1/16/2003 Checking S Julie London Salary/Family Living R 923.07 Taxes:Fed/Family Living R -87.00 Taxes:FICA/Family Living R -57.23 Taxes:State/Family Living R -25.85 Taxes:Other/Family Living R -13.38 1/19/2003 Checking S Julie London Salary/Family Living R 923.07 Taxes:Fed/Family Living R -87.00 Taxes:FICA/Family Living R -57.23 Taxes:State/Family Living R -25.85 Taxes:Other/Family Living R -13.38 1/22/2003 Checking 1007 Hometown Homeland Groceries Groceries/Family Living R -44.12 2/1/2003 Checking 1009 REC electric Utilities/Family Living R -125.00 2/1/2003 Checking 1008 Southwestern Bell Phone Telephone/Family Living R -89.76 2/2/2003 Checking S Julie London Salary/Family Living R 923.07 Taxes:Fed/Family Living R -87.00 Taxes:FICA/Family Living R -57.23 Taxes:State/Family Living R -25.85 Taxes:Other/Family Living R -13.38 2/5/2003 Checking 1010 Southwestern Bell phone Telephone/Family Living R -66.01 2/16/2003 Checking S Julie London Salary/Family Living R 923.07 Taxes:Fed/Family Living R -87.00 Taxes:FICA/Family Living R -57.23 Taxes:State/Family Living R -25.85 Taxes:Other/Family Living R -13.38 2/28/2003 Checking S Julie London Salary/Family Living R 923.07 Taxes:Fed/Family Living R -87.00 Taxes:FICA/Family Living R -57.23 Taxes:State/Family Living R -25.85 Taxes:Other/Family Living R -13.38 TOTAL 1/1/2003 - 2/28/2003 3,423.00 BALANCE 2/28/2003 -6,147.39 TOTAL INFLOWS 5,538.42 TOTAL OUTFLOWS -2,115.42 NET TOTAL 3,423.00

41

Cash Flow 1/1/2002 Through 12/31/2002

11/20/2002 Page 1 1/1/2002- Category Description 12/31/2002 INFLOWS Uncategorized 0.00 Coop Distributions 27.67 Government Payments 3,112.00 Int Inc 92.73 Raised Sales Grain 42,169.64 Livestock 38,010.00 TOTAL Raised Sales 80,179.64 Salary 17,538.33 FROM CrdtLine 32,000.00 TOTAL INFLOWS 132,950.37 OUTFLOWS Auto 262.88 Service 182.58 TOTAL Auto 445.46 Bank Chrg 14.80 Charity 1,185.00 Christmas 778.54 Clothing 998.27 Consultants 150.00 Dining 414.36 Dues Farm Dues 24.00 TOTAL Dues 24.00 Entertain 281.02 Feed Purchased 1,635.00 Fertilizer & Lime 10,526.73 Freight and Trucking 186.20 Gas, Fuel, & Oil 6,743.00 Gifts 426.66 Groceries 2,617.73 Home Rpair 1,620.74 Household 157.64 Insurance 2,621.45 Interest Expense Farm Interest Other 603.61 TOTAL Interest Expense 603.61 Labor Hired 4,010.00 Medical 533.79 Misc 293.52 Mortgage Interest 8,109.00 Other Expenses Farm Expenses Other 559.00 TOTAL Other Expenses 559.00 Recreation 3,000.00 Rent Land 8,055.00 TOTAL Rent 8,055.00 Repairs and Maintenance 8,196.50 Subscriptions 60.00 Taxes Farm Property Taxes 6,153.33 Fed 1,653.00 FICA 1,087.37 Other 254.22 State 846.15 TOTAL Taxes 9,994.07

42

Cash Flow 1/1/2002 Through 12/31/2002

11/20/2002 Page 2 1/1/2002- Category Description 12/31/2002 Telephone 434.40 Utilities 1,311.16 Veterinary 1,756.50 TO CrdtLine 48,000.00 TO LandNote 4,731.00 TO PkupNote 7,545.10 TOTAL OUTFLOWS 138,019.25 OVERALL TOTAL -5,068.88

43

London Cash Flow by Month 1/1/2002 Through 12/31/2002

11/20/2002 Page 1

1/1/2002- 2/1/2002- 3/1/2002- 4/1/2002- 5/1/2002- 6/1/2002- 7/1/2002- 8/1/2002- 9/1/2002- 10/1/2002- 11/1/2002- 12/1/2002- OVERALL Category Description 1/31/2002 2/28/2002 3/31/2002 4/30/2002 5/31/2002 6/30/2002 7/31/2002 8/31/2002 9/30/2002 10/31/2002 11/30/2002 12/31/2002 TOTAL INFLOWS Uncategorized 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Coop Distributions 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 27.67 0.00 0.00 27.67 Government Payments 0.00 0.00 3,112.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 3,112.00 Int Inc 0.00 4.12 4.72 6.31 7.18 5.08 7.38 5.31 8.42 3.45 4.19 36.57 92.73 Raised Sales Grain 0.00 0.00 0.00 0.00 0.00 0.00 42,169.64 0.00 0.00 0.00 0.00 0.00 42,169.64 Livestock 0.00 0.00 38,010.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 38,010.00 TOTAL Raised Sales 0.00 0.00 38,010.00 0.00 0.00 0.00 42,169.64 0.00 0.00 0.00 0.00 0.00 80,179.64 Salary 0.00 0.00 0.00 1,846.14 1,846.14 1,846.14 1,846.14 1,846.14 2,769.21 1,846.14 1,846.14 1,846.14 17,538.33 FROM CrdtLine 0.00 0.00 0.00 3,000.00 0.00 5,000.00 0.00 20,000.00 0.00 0.00 0.00 4,000.00 32,000.00 TOTAL INFLOWS 0.00 4.12 41,126.72 4,852.45 1,853.32 6,851.22 44,023.16 21,851.45 2,777.63 1,877.26 1,850.33 5,882.71 132,950.37 OUTFLOWS Auto 0.00 0.00 0.00 0.00 0.00 0.00 0.00 262.88 0.00 0.00 0.00 0.00 262.88 Service 0.00 0.00 0.00 0.00 15.00 7.00 62.41 98.17 0.00 0.00 0.00 0.00 182.58 TOTAL Auto 0.00 0.00 0.00 0.00 15.00 7.00 62.41 361.05 0.00 0.00 0.00 0.00 445.46 Bank Chrg 0.00 1.00 1.00 1.00 1.00 1.00 1.00 4.80 0.00 2.00 2.00 0.00 14.80 Charity 135.00 90.00 90.00 90.00 120.00 90.00 30.00 120.00 90.00 120.00 120.00 90.00 1,185.00 Christmas 0.00 0.00 0.00 0.00 0.00 0.00 0.00 285.44 0.00 0.00 269.67 223.43 778.54 Clothing 27.80 51.87 40.00 0.00 0.00 25.80 175.46 434.46 10.00 16.75 165.25 50.88 998.27 Consultants 0.00 0.00 0.00 150.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 150.00 Dining 15.00 15.00 0.00 64.75 45.00 60.00 0.00 30.00 60.00 53.00 15.00 56.61 414.36 Dues Farm Dues 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 24.00 0.00 0.00 0.00 24.00 TOTAL Dues 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 24.00 0.00 0.00 0.00 24.00 Entertain 18.29 18.30 18.30 9.51 18.30 18.30 49.56 19.96 54.26 36.42 0.00 19.82 281.02 Feed Purchased 897.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 369.00 369.00 0.00 1,635.00 Fertilizer & Lime 0.00 6,181.73 0.00 0.00 0.00 0.00 0.00 0.00 4,345.00 0.00 0.00 0.00 10,526.73 Freight and Trucking 0.00 0.00 186.20 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 186.20 Gas, Fuel, & Oil 108.50 108.50 108.50 102.00 48.50 2,905.00 1,978.00 487.00 793.00 52.00 52.00 0.00 6,743.00 Gifts 0.00 0.00 0.00 103.44 87.22 45.22 0.00 55.44 0.00 0.00 85.34 50.00 426.66 Groceries 316.88 133.88 248.26 181.93 185.64 354.45 34.44 415.97 303.46 8.36 287.00 147.46 2,617.73 Home Rpair 0.00 0.00 645.74 0.00 0.00 0.00 975.00 0.00 0.00 0.00 0.00 0.00 1,620.74 Household 0.00 0.00 0.00 0.00 28.21 0.00 0.00 40.43 0.00 0.00 89.00 0.00 157.64 Insurance 0.00 0.00 330.90 0.00 0.00 0.00 1,051.00 601.48 330.90 102.39 102.39 102.39 2,621.45 Interest Expense Farm Interest Other 0.00 0.00 0.00 603.61 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 603.61 TOTAL Interest Expense 0.00 0.00 0.00 603.61 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 603.61 Labor Hired 0.00 0.00 0.00 0.00 0.00 1,523.00 963.00 782.00 742.00 0.00 0.00 0.00 4,010.00 Medical 70.00 0.00 0.00 20.00 0.00 0.00 0.00 264.09 43.00 27.89 52.01 56.80 533.79 Misc 0.00 0.00 32.18 84.46 39.00 0.00 0.00 87.88 0.00 0.00 0.00 50.00 293.52 Mortgage Interest 0.00 0.00 0.00 0.00 0.00 0.00 0.00 8,109.00 0.00 0.00 0.00 0.00 8,109.00 Other Expenses Farm Expenses Other 0.00 0.00 0.00 0.00 0.00 0.00 0.00 228.00 0.00 0.00 331.00 0.00 559.00 TOTAL Other Expenses 0.00 0.00 0.00 0.00 0.00 0.00 0.00 228.00 0.00 0.00 331.00 0.00 559.00 Recreation 0.00 0.00 0.00 0.00 0.00 0.00 0.00 3,000.00 0.00 0.00 0.00 0.00 3,000.00 Rent Land 0.00 0.00 0.00 0.00 0.00 0.00 0.00 1,575.00 6,480.00 0.00 0.00 0.00 8,055.00 TOTAL Rent 0.00 0.00 0.00 0.00 0.00 0.00 0.00 1,575.00 6,480.00 0.00 0.00 0.00 8,055.00

44

London Cash Flow by Month 1/1/2002 Through 12/31/2002

11/20/2002 Page 2

1/1/2002- 2/1/2002- 3/1/2002- 4/1/2002- 5/1/2002- 6/1/2002- 7/1/2002- 8/1/2002- 9/1/2002- 10/1/2002- 11/1/2002- 12/1/2002- OVERALL Category Description 1/31/2002 2/28/2002 3/31/2002 4/30/2002 5/31/2002 6/30/2002 7/31/2002 8/31/2002 9/30/2002 10/31/2002 11/30/2002 12/31/2002 TOTAL Repairs and Maintenance 66.00 20.00 20.00 20.00 306.50 1,449.00 4,872.00 542.00 861.00 20.00 20.00 0.00 8,196.50 Subscriptions 0.00 0.00 45.00 0.00 0.00 0.00 0.00 0.00 0.00 15.00 0.00 0.00 60.00 Taxes Farm Property Taxes 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 6,153.33 6,153.33 Fed 0.00 0.00 0.00 174.00 174.00 174.00 174.00 174.00 261.00 174.00 174.00 174.00 1,653.00 FICA 0.00 0.00 0.00 114.46 114.46 114.46 114.46 114.46 171.69 114.46 114.46 114.46 1,087.37 Other 0.00 0.00 0.00 26.76 26.76 26.76 26.76 26.76 40.14 26.76 26.76 26.76 254.22 State 0.00 0.00 0.00 406.70 51.70 51.70 51.70 51.70 77.55 51.70 51.70 51.70 846.15 TOTAL Taxes 0.00 0.00 0.00 721.92 366.92 366.92 366.92 366.92 550.38 366.92 366.92 6,520.25 9,994.07 Telephone 0.00 96.25 218.76 0.00 62.34 59.07 66.98 56.00 0.00 0.00 0.00 -125.00 434.40 Utilities 61.66 124.25 95.61 64.23 76.72 30.47 82.60 342.41 145.20 89.56 112.49 85.96 1,311.16 Veterinary 0.00 508.00 283.00 0.00 613.50 0.00 0.00 0.00 0.00 352.00 0.00 0.00 1,756.50 TO CrdtLine 0.00 0.00 30,000.00 0.00 0.00 0.00 18,000.00 0.00 0.00 0.00 0.00 0.00 48,000.00 TO LandNote 0.00 0.00 0.00 0.00 0.00 0.00 0.00 4,731.00 0.00 0.00 0.00 0.00 4,731.00 TO PkupNote 0.00 0.00 0.00 7,545.10 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 7,545.10 TOTAL OUTFLOWS 1,716.13 7,348.78 32,363.45 9,761.95 2,013.85 6,935.23 28,708.37 22,940.33 14,832.20 1,631.29 2,439.07 7,328.60 138,019.25 OVERALL TOTAL -1,716.13 -7,344.66 8,763.27 -4,909.50 -160.53 -84.01 15,314.79 -1,088.88 -12,054.57 245.97 -588.74 -1,445.89 -5,068.88

45

London Cash Flow by Enterprise

1/1/2002 Through 12/31/2002 11/20/2002 Page 1

Unclassified Transactions CowCalf Family Living Overhead Wheat OVERALL Category Description TOTAL INFLOWS Uncategorized 0.00 0.00 0.00 0.00 0.00 0.00 Coop Distributions 0.00 0.00 0.00 27.67 0.00 27.67 Government Payments 0.00 0.00 0.00 0.00 3,112.00 3,112.00 Int Inc 0.00 0.00 92.73 0.00 0.00 92.73 Raised Sales Grain 0.00 0.00 0.00 0.00 42,169.64 42,169.64 Livestock 0.00 38,010.00 0.00 0.00 0.00 38,010.00 TOTAL Raised Sales 0.00 38,010.00 0.00 0.00 42,169.64 80,179.64 Salary 0.00 0.00 17,538.33 0.00 0.00 17,538.33 FROM CrdtLine 32,000.00 0.00 0.00 0.00 0.00 32,000.00 TOTAL INFLOWS 32,000.00 38,010.00 17,631.06 27.67 45,281.64 132,950.37 OUTFLOWS Auto 0.00 0.00 262.88 0.00 0.00 262.88 Service 0.00 0.00 182.58 0.00 0.00 182.58 TOTAL Auto 0.00 0.00 445.46 0.00 0.00 445.46 Bank Chrg 0.00 0.00 14.80 0.00 0.00 14.80 Charity 0.00 0.00 1,185.00 0.00 0.00 1,185.00 Christmas 0.00 0.00 778.54 0.00 0.00 778.54 Clothing 0.00 0.00 998.27 0.00 0.00 998.27 Consultants 0.00 0.00 150.00 0.00 0.00 150.00 Dining 0.00 0.00 414.36 0.00 0.00 414.36 Dues Farm Dues 0.00 0.00 0.00 24.00 0.00 24.00 TOTAL Dues 0.00 0.00 0.00 24.00 0.00 24.00 Entertain 0.00 0.00 281.02 0.00 0.00 281.02 Feed Purchased 0.00 1,635.00 0.00 0.00 0.00 1,635.00 Fertilizer & Lime 0.00 0.00 0.00 0.00 10,526.73 10,526.73 Freight and Trucking 0.00 186.20 0.00 0.00 0.00 186.20 Gas, Fuel, & Oil 0.00 801.00 0.00 0.00 5,942.00 6,743.00 Gifts 0.00 0.00 426.66 0.00 0.00 426.66 Groceries 0.00 0.00 2,617.73 0.00 0.00 2,617.73 Home Rpair 0.00 0.00 1,620.74 0.00 0.00 1,620.74 Household 0.00 0.00 157.64 0.00 0.00 157.64 Insurance 0.00 0.00 2,621.45 0.00 0.00 2,621.45 Interest Expense Farm Interest Other 0.00 0.00 0.00 603.61 0.00 603.61 TOTAL Interest Expense 0.00 0.00 0.00 603.61 0.00 603.61 Labor Hired 0.00 0.00 0.00 0.00 4,010.00 4,010.00 Medical 0.00 0.00 533.79 0.00 0.00 533.79 Misc 0.00 62.01 231.51 0.00 0.00 293.52 Mortgage Interest 0.00 0.00 0.00 8,109.00 0.00 8,109.00 Other Expenses Farm Expenses Other 0.00 331.00 0.00 0.00 228.00 559.00 TOTAL Other Expenses 0.00 331.00 0.00 0.00 228.00 559.00 Recreation 0.00 0.00 3,000.00 0.00 0.00 3,000.00 Rent Land 0.00 1,575.00 0.00 0.00 6,480.00 8,055.00 TOTAL Rent 0.00 1,575.00 0.00 0.00 6,480.00 8,055.00

46

London Cash Flow by Enterprise 1/1/2002 Through 12/31/2002

11/20/2002 Page 2

Unclassified Transactions CowCalf Family Living Overhead Wheat OVERALL Category Description TOTAL Repairs and Maintenance 0.00 696.00 15.00 0.00 7,485.50 8,196.50 Subscriptions 0.00 0.00 60.00 0.00 0.00 60.00 Taxes Farm Property Taxes 0.00 0.00 0.00 6,153.33 0.00 6,153.33 Fed 0.00 0.00 1,653.00 0.00 0.00 1,653.00 FICA 0.00 0.00 1,087.37 0.00 0.00 1,087.37 Other 0.00 0.00 254.22 0.00 0.00 254.22 State 0.00 0.00 846.15 0.00 0.00 846.15 TOTAL Taxes 0.00 0.00 3,840.74 6,153.33 0.00 9,994.07 Telephone 0.00 0.00 434.40 0.00 0.00 434.40 Utilities 0.00 0.00 1,311.16 0.00 0.00 1,311.16 Veterinary 0.00 1,756.50 0.00 0.00 0.00 1,756.50 TO CrdtLine 48,000.00 0.00 0.00 0.00 0.00 48,000.00 TO LandNote 4,731.00 0.00 0.00 0.00 0.00 4,731.00 TO PkupNote 7,545.10 0.00 0.00 0.00 0.00 7,545.10 TOTAL OUTFLOWS 60,276.10 7,042.71 21,138.27 14,889.94 34,672.23 138,019.25 OVERALL TOTAL -28,276.10 30,967.29 -3,507.21 -14,862.27 10,609.41 -5,068.88

47

Deere Transactions Summary 1/1/2002 Through 12/31/2002

11/20/2002 Page 1

CowCalf Wheat OVERALL Category Description TOTAL OUTFLOWS Repairs and Maintenance 660.00 4,926.00 5,586.00 TOTAL OUTFLOWS 660.00 4,926.00 5,586.00 OVERALL TOTAL -660.00 -4,926.00 -5,586.00

48

Tax Schedule 1/1/2002 Through 12/31/2002

11/21/2002 Page 1

Date Account Num Description Memo Category Clr Amount Schedule A Medicine and drugs 1/29/2002 Checking 727 Dan Dentist Medical/Family Living -70.00 4/12/2002 Checking 781 Mytown Medical Center Medical/Family Living R -20.00 8/12/2002 Checking 878 Albertson's Medical/Family Living R -6.59 8/16/2002 Checking 881 Care Clinic Medical/Family Living R -26.00 8/18/2002 Checking 888 Don Dentist, DDS Exam & X-rays Medical/Family Living R -225.00 8/19/2002 Checking 890 Care Clinic Medical/Family Living R -6.50 9/17/2002 Checking 921 Care Clinic Medical/Family Living R -30.00 9/30/2002 Checking 933 Care Clinic Medical/Family Living R -13.00 10/9/2002 Checking 940 Alan's Pharmacy Medical/Family Living R -14.89 10/28/2002 Checking 948 Care Clinic Medical/Family Living R -13.00 11/6/2002 Checking 960 Tiger Drug Medical/Family Living R -28.19 11/25/2002 Checking 969 Care Clinic Medical/Family Living R -13.00 11/29/2002 Checking 972 Tiger Drug Medical/Family Living R -10.82 12/10/2002 Checking 985 Mytown Medical Center Medical Medical/Family Living R -56.80 TOTAL Medicine and drugs -533.79 Home mortgage interest (1098) 8/15/2002 Checking 880 FLB Mortgage Interest/Overhead R -8,109.00 TOTAL Home mortgage interest (1098) -8,109.00 Cash charity contributions 1/15/2002 Checking 717 St. Andrew Church Charity/Family Living -30.00 1/21/2002 Checking 722 St. Andrew Church Charity/Family Living -30.00 1/21/2002 Checking 723 4-H Scholarship Fund Charity/Family Living -25.00 1/28/2002 Checking 726 St. Andrew Church Charity/Family Living -30.00 1/30/2002 Checking 729 OSU Alumni Chapter Charity/Family Living -20.00 2/12/2002 Checking 736 St. Andrew Church Charity/Family Living R -30.00 2/18/2002 Checking 739 St. Andrew Church Charity/Family Living R -30.00 2/19/2002 Checking 743 St. Andrew Church Charity/Family Living R -30.00 3/18/2002 Checking 756 St. Andrew Church Charity/Family Living R -30.00 3/25/2002 Checking 761 St. Andrew Church Charity/Family Living R -30.00 3/30/2002 Checking 767 St. Andrew Church Charity/Family Living R -30.00 4/8/2002 Checking 779 St. Andrew Church Charity/Family Living R -30.00 4/21/2002 Checking 784 St. Andrew Church Charity/Family Living R -30.00 4/29/2002 Checking 793 St. Andrew Church Charity/Family Living R -30.00 5/7/2002 Checking 799 St. Andrew Church Charity/Family Living R -30.00 5/9/2002 Checking 802 St. Andrew Church Charity/Family Living R -30.00 5/21/2002 Checking 806 St. Andrew Church Charity/Family Living R -30.00 5/30/2002 Checking 820 St. Andrew Church Charity/Family Living R -30.00 6/4/2002 Checking 824 St. Andrew Church Charity/Family Living R -30.00 6/17/2002 Checking 833 St. Andrew Church Charity/Family Living R -30.00 6/24/2002 Checking 835 St. Andrew Church Charity/Family Living R -30.00 7/1/2002 Checking 847 St. Andrew Church Charity/Family Living R -30.00 8/2/2002 Checking 867 St. Andrew Church Charity/Family Living R -30.00 8/17/2002 Checking 884 St. Andrew Church Charity/Family Living R -30.00 8/19/2002 Checking 889 St. Andrew Church Charity/Family Living R -30.00 8/26/2002 Checking 902 St. Andrew Church Charity/Family Living R -30.00 9/10/2002 Checking 915 St. Andrew Church Charity/Family Living R -30.00 9/23/2002 Checking 923 St. Andrew Church Charity/Family Living R -30.00 9/24/2002 Checking 924 St. Andrew Church Charity/Family Living R -30.00 10/1/2002 Checking 935 St. Andrew Church Charity/Family Living R -30.00 10/7/2002 Checking 939 St. Andrew Church Charity/Family Living R -30.00 10/28/2002 Checking 951 St. Andrew Church Charity/Family Living R -30.00 10/28/2002 Checking 952 St. Andrew Church Charity/Family Living R -30.00 11/2/2002 Checking 958 St. Andrew Church Charity/Family Living R -30.00 11/18/2002 Checking 963 St. Andrew Church Charity/Family Living R -30.00 11/19/2002 Checking 964 St. Andrew Church Charity/Family Living R -30.00 11/25/2002 Checking 967 St. Andrew Church Charity/Family Living R -30.00 12/4/2002 Checking 978 St. Andrew Church Charity/Family Living R -30.00 12/10/2002 Checking 986 St. Andrew Church Charity/Family Living R -30.00 12/17/2002 Checking 995 St. Andrew Church Charity/Family Living R -30.00 TOTAL Cash charity contributions -1,185.00

49

Tax Schedule 1/1/2002 Through 12/31/2002

11/21/2002 Page 2

Date Account Num Description Memo Category Clr Amount Schedule B Interest income 2/16/2002 Checking Interest Earned Int Inc/Family Living R 4.12 3/16/2002 Checking Interest Earned Int Inc/Family Living R 4.72 4/18/2002 Checking Interest Earned Int Inc/Family Living R 6.31 5/16/2002 Checking Interest Earned Int Inc/Family Living R 7.18 6/16/2002 Checking Interest Earned Int Inc/Family Living R 5.08 7/19/2002 Checking Interest Earned Int Inc/Family Living R 7.38 8/16/2002 Checking Interest Earned Int Inc/Family Living R 5.31 9/19/2002 Checking Interest Earned Int Inc/Family Living R 8.42 10/18/2002 Checking Interest Earned Int Inc/Family Living R 3.45 11/16/2002 Checking Interest Earned Int Inc/Family Living R 4.19 12/18/2002 Checking Interest Earned Int Inc/Family Living R 3.23 12/29/2002 Checking Interest from savings interest Int Inc/Family Living R 33.34 TOTAL Interest income 92.73 Schedule F Sales livestock/product raised 3/8/2002 Checking Steer Sales 28 hd @ 7.0 cwt. … Raised Sales:Livestock/… R 18,375.00 3/8/2002 Checking Heifer Sales 34 hd @ 7.0 cwt … Raised Sales:Livestock/… R 19,635.00 7/5/2002 Checking Wheat sales 7567.4 bu @ 3.3… Raised Sales:Grain/Wheat R 25,358.00 7/15/2002 Checking Wheat sales 5018.4 bu @ $3…. Raised Sales:Grain/Wheat R 16,811.64 TOTAL Sales livestock/product raised 80,179.64 Total co-op. distributions 10/2/2002 Checking Coop Dividend Coop Distributions/Over… R 27.67 TOTAL Total co-op. distributions 27.67 Agricultural program payments 3/30/2002 Checking Deposit ASCS payment Government Payments/… R 3,112.00 TOTAL Agricultural program payments 3,112.00 Feed purchased 1/16/2002 Checking 718 S Klondike Co-op Feed Purchased/CowCalf -528.00 1/31/2002 Checking 732 S Klondike Co-op Feed Purchased/CowCalf -369.00 10/30/2002 Checking 955 S J & M Farm Store Feed Purchased/CowCalf R -369.00 11/30/2002 Checking 974 S M & W Feed Feed Purchased/CowCalf R -369.00 TOTAL Feed purchased -1,635.00 Fertilizers and lime 2/21/2002 Checking 744 S Klondike Co-op Fertilizer & Lime/Wheat R -4,005.73 2/28/2002 Checking 749 S J & M Farm Store Fertilizer & Lime/Wheat R -2,176.00 9/30/2002 Checking 932 S Klondike Co-op Fertilizer & Lime/Wheat R -4,345.00 TOTAL Fertilizers and lime -10,526.73 Freight and trucking 3/19/2002 Checking 757 Rafter H Trucking 98 miles @1.9… Freight and Trucking/C… R -186.20 TOTAL Freight and trucking -186.20 Gasoline, fuel, and oil 1/16/2002 Checking 718 S Klondike Co-op Gas, Fuel, & Oil/CowCalf -56.50 1/31/2002 Checking 732 S Klondike Co-op Gas, Fuel, & Oil/CowCalf -52.00 2/21/2002 Checking 744 S Klondike Co-op Gas, Fuel, & Oil/CowCalf R -56.50 2/28/2002 Checking 749 S J & M Farm Store Gas, Fuel, & Oil/CowCalf R -52.00

50

Tax Schedule 1/1/2002 Through 12/31/2002

11/21/2002 Page 3

Date Account Num Description Memo Category Clr Amount 3/29/2002 Checking 765 Klondike Co-op Gas, Fuel, & Oil/CowCalf R -56.50 3/30/2002 Checking 773 Klondike Co-op Gas, Fuel, & Oil/CowCalf R -52.00 4/29/2002 Checking 790 J & M Farm Store Gas, Fuel, & Oil/CowCalf R -50.00 4/30/2002 Checking 794 Klondike Co-op Gas, Fuel, & Oil/CowCalf R -52.00 5/28/2002 Checking 816 Klondike Co-op Gas, Fuel, & Oil/CowCalf R -48.50 6/16/2002 Checking 827 S Klondike Co-op Gas, Fuel, & Oil/CowCalf R -42.00 Gas, Fuel, & Oil/Wheat R -1,522.00 6/25/2002 Checking 838 S Klondike Co-op Gas, Fuel, & Oil/CowCalf R -26.00 Gas, Fuel, & Oil/Wheat R -1,315.00 7/20/2002 Checking 852 S Klondike Co-op Gas, Fuel, & Oil/CowCalf R -60.00 Gas, Fuel, & Oil/Wheat R -1,004.00 7/30/2002 Checking 861 S J & M Farm Store Gas, Fuel, & Oil/CowCalf R -26.00 Gas, Fuel, & Oil/Wheat R -888.00 8/30/2002 Checking 905 S J & M Farm Store Gas, Fuel, & Oil/Wheat R -461.00 Gas, Fuel, & Oil/CowCalf R -26.00 9/30/2002 Checking 932 S Klondike Co-op Gas, Fuel, & Oil/Wheat R -752.00 Gas, Fuel, & Oil/CowCalf R -41.00 10/30/2002 Checking 955 S J & M Farm Store Gas, Fuel, & Oil/CowCalf R -52.00 11/30/2002 Checking 974 S M & W Feed Gas, Fuel, & Oil/CowCalf R -52.00 TOTAL Gasoline, fuel, and oil -6,743.00 Interest expense, other 4/28/2002 Checking 789 S 1st Nat'l Bank Interest Expense:Farm I… R -603.61 TOTAL Interest expense, other -603.61 Labor hired 6/30/2002 Checking 841 Whitey Fang Labor Hired/Wheat R -1,523.00 7/30/2002 Checking 860 Whitey Fang Labor Hired/Wheat R -963.00 8/14/2002 Checking 879 Whitey Fang Labor Hired/Wheat R -782.00 9/15/2002 Checking 920 Whitey Fang Labor Hired/Wheat R -742.00 TOTAL Labor hired -4,010.00 Rent/lease land, animals 8/30/2002 Checking 904 Iona Section Rent:Land/CowCalf R -1,575.00 9/30/2002 Checking 931 Iona Section Rent:Land/Wheat R -6,480.00 TOTAL Rent/lease land, animals -8,055.00 Repairs and maintenance 1/11/2002 Checking 716 Yukon John Deere Repairs for winc… Repairs and Maintenanc… -20.00 1/24/2002 Checking 724 Yukon John Deere Repairs and Maintenanc… -26.00 1/31/2002 Checking 730 Yukon John Deere Repairs for winc… Repairs and Maintenanc… -20.00 2/28/2002 Checking 748 Yukon John Deere Pickup Repairs Repairs and Maintenanc… R -20.00 3/30/2002 Checking 769 Yukon John Deere Repairs and Maintenanc… R -20.00 4/30/2002 Checking 795 Yukon John Deere Repairs and Maintenanc… R -20.00 5/25/2002 Checking 810 Smith Bros. Combine Repair Shop 1099 Repairs and Maintenanc… R -145.50 5/25/2002 Checking 811 Reeser's Eye Wear Glasses Repairs and Maintenanc… R -15.00 5/30/2002 Checking 817 Yukon John Deere Repairs and Maintenanc… R -20.00 5/30/2002 Checking 818 Hepplers Machine Shop 1099 Repairs and Maintenanc… R -126.00 6/30/2002 Checking 840 S John's repair shop Repairs and Maintenanc… R -1,429.00 Repairs and Maintenanc… R -20.00 7/1/2002 Checking 844 Smith Bros. Combine Repair Shop 1099 Repairs and Maintenanc… R -750.00 7/1/2002 Checking 845 S Yukon John Deere Repairs and Maintenanc… R -1,600.00 Repairs and Maintenanc… R -42.00 7/24/2002 Checking 853 S Yukon John Deere Repairs and Maintenanc… R -1,600.00 Repairs and Maintenanc… R -42.00 7/27/2002 Checking 856 Heppler's Machine Shop 1099 Repairs and Maintenanc… R -16.00 7/30/2002 Checking 859 S Yukon John Deere Repairs and Maintenanc… R -802.00 Repairs and Maintenanc… R -20.00 8/30/2002 Checking 903 S Yukon John Deere Repairs and Maintenanc… R -350.00 Repairs and Maintenanc… R -192.00 9/2/2002 Checking 907 Smith Bros. Combine Repair Shop 1099 Repairs and Maintenanc… R -109.00 9/30/2002 Checking 927 S Yukon John Deere Repairs and Maintenanc… R -20.00 Repairs and Maintenanc… R -732.00

51

Tax Schedule 1/1/2002 Through 12/31/2002

11/21/2002 Page 4

Date Account Num Description Memo Category Clr Amount 10/30/2002 Checking 956 Yukon John Deere Repairs and Maintenanc… R -20.00 11/29/2002 Checking 971 Yukon John Deere Repairs and Maintenanc… R -20.00 TOTAL Repairs and maintenance -8,196.50 Taxes 12/15/2002 Checking 991 County Treasurer 2002 property taxes Taxes:Farm Property Ta… R -6,153.33 TOTAL Taxes -6,153.33 Vet, breeding, and medicine 2/14/2002 Checking 737 James Herriot Veterinary/CowCalf R -508.00 3/30/2002 Checking 770 Hi Pro Animal Health Veterinary/CowCalf R -283.00 5/12/2002 Checking 804 James Herriot Veterinary/CowCalf R -86.50 5/30/2002 Checking 819 James Herriot Veterinary/CowCalf R -527.00 10/30/2002 Checking 954 James Herriot Veterinary/CowCalf R -352.00 TOTAL Vet, breeding, and medicine -1,756.50 Other farm expenses 4/1/2002 Checking 774 Annie Accountant Consultants/Family Living R -150.00 8/21/2002 Checking 891 KleenSeed Other Expenses:Farm E… R -228.00 9/6/2002 Checking 912 OK Farm Bureau Dues:Farm Dues/Overhead R -24.00 11/30/2002 Checking 974 S M & W Feed Other Expenses:Farm E… R -331.00 TOTAL Other farm expenses -733.00 W-2 Federal tax withheld, self 4/14/2002 Checking S Julie London Taxes:Fed/Family Living R -87.00 4/28/2002 Checking S Julie London Taxes:Fed/Family Living R -87.00 5/12/2002 Checking S Julie London Taxes:Fed/Family Living R -87.00 5/26/2002 Checking S Julie London Taxes:Fed/Family Living R -87.00 6/9/2002 Checking S Julie London Taxes:Fed/Family Living R -87.00 6/23/2002 Checking S Julie London Taxes:Fed/Family Living R -87.00 7/7/2002 Checking S Julie London Taxes:Fed/Family Living R -87.00 7/21/2002 Checking S Julie London Taxes:Fed/Family Living R -87.00 8/4/2002 Checking S Julie London Taxes:Fed/Family Living R -87.00 8/18/2002 Checking S Julie London Taxes:Fed/Family Living R -87.00 9/1/2002 Checking S Julie London Taxes:Fed/Family Living R -87.00 9/15/2002 Checking S Julie London Taxes:Fed/Family Living R -87.00 9/29/2002 Checking S Julie London Taxes:Fed/Family Living R -87.00 10/13/2002 Checking S Julie London Taxes:Fed/Family Living R -87.00 10/27/2002 Checking S Julie London Taxes:Fed/Family Living R -87.00 11/10/2002 Checking S Julie London Taxes:Fed/Family Living R -87.00 11/24/2002 Checking S Julie London Taxes:Fed/Family Living R -87.00 12/8/2002 Checking S Julie London Taxes:Fed/Family Living R -87.00 12/22/2002 Checking S Julie London Taxes:Fed/Family Living R -87.00 TOTAL Federal tax withheld, self -1,653.00 Soc. Sec. tax withheld, self 4/14/2002 Checking S Julie London Taxes:FICA/Family Living R -57.23 4/28/2002 Checking S Julie London Taxes:FICA/Family Living R -57.23 5/12/2002 Checking S Julie London Taxes:FICA/Family Living R -57.23 5/26/2002 Checking S Julie London Taxes:FICA/Family Living R -57.23 6/9/2002 Checking S Julie London Taxes:FICA/Family Living R -57.23 6/23/2002 Checking S Julie London Taxes:FICA/Family Living R -57.23 7/7/2002 Checking S Julie London Taxes:FICA/Family Living R -57.23 7/21/2002 Checking S Julie London Taxes:FICA/Family Living R -57.23 8/4/2002 Checking S Julie London Taxes:FICA/Family Living R -57.23 8/18/2002 Checking S Julie London Taxes:FICA/Family Living R -57.23 9/1/2002 Checking S Julie London Taxes:FICA/Family Living R -57.23 9/15/2002 Checking S Julie London Taxes:FICA/Family Living R -57.23 9/29/2002 Checking S Julie London Taxes:FICA/Family Living R -57.23 10/13/2002 Checking S Julie London Taxes:FICA/Family Living R -57.23

52

Tax Schedule 1/1/2002 Through 12/31/2002

11/21/2002 Page 5

Date Account Num Description Memo Category Clr Amount 10/27/2002 Checking S Julie London Taxes:FICA/Family Living R -57.23 11/10/2002 Checking S Julie London Taxes:FICA/Family Living R -57.23 11/24/2002 Checking S Julie London Taxes:FICA/Family Living R -57.23 12/8/2002 Checking S Julie London Taxes:FICA/Family Living R -57.23 12/22/2002 Checking S Julie London Taxes:FICA/Family Living R -57.23 TOTAL Soc. Sec. tax withheld, self -1,087.37 State tax withheld, self 4/13/2002 Checking 783 Oklahoma Tax Commission Taxes:State/Family Living R -355.00 4/14/2002 Checking S Julie London Taxes:State/Family Living R -25.85 4/28/2002 Checking S Julie London Taxes:State/Family Living R -25.85 5/12/2002 Checking S Julie London Taxes:State/Family Living R -25.85 5/26/2002 Checking S Julie London Taxes:State/Family Living R -25.85 6/9/2002 Checking S Julie London Taxes:State/Family Living R -25.85 6/23/2002 Checking S Julie London Taxes:State/Family Living R -25.85 7/7/2002 Checking S Julie London Taxes:State/Family Living R -25.85 7/21/2002 Checking S Julie London Taxes:State/Family Living R -25.85 8/4/2002 Checking S Julie London Taxes:State/Family Living R -25.85 8/18/2002 Checking S Julie London Taxes:State/Family Living R -25.85 9/1/2002 Checking S Julie London Taxes:State/Family Living R -25.85 9/15/2002 Checking S Julie London Taxes:State/Family Living R -25.85 9/29/2002 Checking S Julie London Taxes:State/Family Living R -25.85 10/13/2002 Checking S Julie London Taxes:State/Family Living R -25.85 10/27/2002 Checking S Julie London Taxes:State/Family Living R -25.85 11/10/2002 Checking S Julie London Taxes:State/Family Living R -25.85 11/24/2002 Checking S Julie London Taxes:State/Family Living R -25.85 12/8/2002 Checking S Julie London Taxes:State/Family Living R -25.85 12/22/2002 Checking S Julie London Taxes:State/Family Living R -25.85 TOTAL State tax withheld, self -846.15

53

Tax Schedule 1/1/2002 Through 12/31/2002

11/21/2002 Page 1

Date Account Num Description Memo Category Clr Amount Schedule A Medicine and drugs -533.79 Home mortgage interest (1098) -8,109.00 Cash charity contributions -1,185.00 Schedule B Interest income 92.73 Schedule F Sales livestock/product raised 80,179.64 Total co-op. distributions 27.67 Agricultural program payments 3,112.00 Feed purchased -1,635.00 Fertilizers and lime -10,526.73 Freight and trucking -186.20 Gasoline, fuel, and oil -6,743.00 Interest expense, other -603.61 Labor hired -4,010.00 Rent/lease land, animals -8,055.00 Repairs and maintenance -8,196.50 Taxes -6,153.33 Vet, breeding, and medicine -1,756.50 Other farm expenses -733.00 W-2 Federal tax withheld, self -1,653.00 Soc. Sec. tax withheld, self -1,087.37 State tax withheld, self -846.15

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Reconciling the Bank Statement in Quicken 2003

Reconciling your Quicken account with your bank statement serves as a good “check” on the completeness and accuracy of your data entry for bank accounts. The reconciliation process includes: • Entering information from your bank statement. • Marking cleared transactions in the Reconcile window. You may add missing transactions or

edit existing transactions as you go. • Comparing the cleared balance with your bank ending balance to see whether a difference

exists. You may create and print a reconciliation report, but you are not required to do so. If you are not currently reconciling your bank statements in Quicken, you should be! Here is why: 1. Opportunity to make sure the bank is handling your money correctly. 2. Catches duplicate entries, switched numbers, or transactions you forgot to record. 3. Helps discover irregular activities that can reveal stolen checks, incorrect electronic transfers,

or misuse of an ATM card. 4. Allows use of the “Start New Year” feature in Quicken.

Using the Lond03 file with the Checking register open, click on Reconcile at the top left of the check register screen (or click on Cash Flow, Reconcile, Checking). Using the attached bank statement, enter the requested information on the screen:

Click on OK.

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Entries for service charges and interest earned are recorded as transactions and checked as cleared in the reconciliation screen that follows. Payments and Checks are listed at left and Deposits at right:

You may mark transactions as cleared using either the space bar or the mouse (clicking

and dragging will mark a series of transactions as cleared). A check mark is placed by cleared transactions. You may add missing transactions, delete duplicate transactions or edit entries with mistakes as you go. Use the attached bank statement to identify and mark cleared transactions. It may help to change the view to “sort by check number” or “sort by date.” To do this, click on View at the right of the window and select the appropriate option.

If you find that you forgot to enter a transaction, click on New (top left of the “Statement Summary” window) and you will be taken to the Checking register to enter and record the transaction. You can get back to reconcile by clicking on Return to Reconcile at the right of the screen, or by clicking on Reconcile in the Checking register window menu line.

Continue verifying entries with the 1st National Bank Statement. If you’ve managed to

enter a transaction twice, highlight one of the entries and click on Delete. Confirm that you want to delete the current transaction by clicking on Yes.

Note: If you begin to reconcile the bank statement but are unable to complete it at the time, you can always click on Finish Later. Your work will be saved and you can finish the process at your convenience.

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Have you ever transposed a number in your entry or recorded the wrong amount? With the transaction highlighted, click on Edit in the Reconcile window menu. You are taken to the original entry in the check register and can make the necessary changes in the register and record the entry. Again, click on Return to Reconcile, which will return you to the Summary Statement screen. Once you have marked all cleared payments, checks and deposits, the Difference listed in the bottom right corner should be 0.00 (see below). If it is correct, congratulations!

You can click on Finished. If the Difference amount is not zero, recheck your marked Quicken transactions with

your bank statement. Click on the Back to Statement Summary (upper middle of screen) to check the information you entered from the bank statement. As a last resort, if you are unable to find the difference, select Finished, and Quicken will enter a balance adjustment in your register. Select an Adjustment Date when prompted, and then click on Adjust). You will be asked if you want to create a reconciliation report. Select Yes.

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Print

OK

Note: If you change a reconciled transaction in your check register (it is best not to do this!), the next time you select Reconcile you will see a screen like this:

Your choices are to re-reconcile previous statements using Resolve or to allow Quicken to make an adjusting entry.

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Select the line that shows a discrepancy and Reconcile Again.

The process for reconciling savings accounts is the same for checking. Credit card

accounts have a different opening screen (as shown below), but the rest of the process is similar to the other cash flow center accounts.

Cash accounts do not have a reconcile process. However, if you happen to forget to

record transactions, the balance can be updated. Click on Update Balance. Enter the amount you want in the account and an adjusting entry will be made.

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1st NATIONAL BANK AND TRUST COMPANY

Sixth and Main Streets • P.O. Box 2157 • Nowater, Oklahoma 74076 • (405) 397-2157 Offices in Nowater, Tulsa, Oklahoma City, and Chickasha • Member F.D.I.C.

STATEMENT

Jack and Julie London Account No. Rt. 1, Box 23 1-101-816 Nowater, OK 74076 Statement Date 02/05/02

Services Available. Call for details.

Checking Statement Summary Previous Statement 1/5/02, Balance of ………………………………………………….$ 6,093.27 0 Deposits or other credits totaling ……………………………………………… 0.00

18 checks or other debits totaling ……………………………………………….. 1,662.13 Net interest paid on 1/19/02………………………………… ……………...2.44 YTD interest paid…………………………………………………………….2.44 SS# 444-44-4444 Current Balance as of 2/05/02…………………………………………………………………… …4,433.58 Deposits and other credits……………………………………………………………………………………... Date Amount Transaction Description Miscellaneous Debits……………………………………………………………………………………………. Date Amount Transaction Description 1/19 1.00 ATM fee Checks

Date Check No. Amount Date Check No. Amount 01/11 716 20.00 01/27 725 15.00 01/15 717 30.00 01/27 726 30.00 01/16 718 584.50 01/29 728* 127.05 01/21 719 189.83 01/30 729 20.00 01/21 720 27.80 01/27 730 20.00 01/21 721 61.66 01/27 731 421.00 01/21 722 30.00 01/27 732 18.29 01/21 723 25.00 02/01 733 15.00 01/24 724 26.00

*Indicates skip or change in numerical order

N

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Using the Budget Features in Quicken 2003

Quicken budgets can be used to summarize expected income and expenses for planning purposes. The budget can later be used in comparisons to actual income and expenses to determine whether expectations are being met. If expenses are "over budget", measures can be taken to rein in costs before financial problems are out of control. In this "hands on" session we will use a previously developed file of records for the London farm to practice generating budgets. You will be able to practice many of the steps that you might use in summarizing your own records. Using these instructions, you will: • Develop a whole farm budget for 2003 based on 2002 transactions. • Compare actual records to the budgeted amounts. Choose File Open

Look in: [A:] (or C:\Workshop Files if you followed earlier instructions to copy the diskette to the hard drive)

File name: LOND03 OK

To access the budget features in the file, choose: Planning

Budget •Automatic (if you don’t get this prompt, click on the Setup tab at

upper left corner of the budget window)

Click on Create Budget (note: if this is the first time a budget has been created in the file, you will not have the opportunity to name it; otherwise the prompt for name as shown in the screen that follows will appear):

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Complete the screen as above. This will base the budget for the coming year on the transactions entered for the most recent full year of data, 2001, maintaining the same monthly pattern for income and expenses. Since the amounts are not likely to be exactly the same, we chose to round the values to the nearest $10 for planning purposes.

Click on OK

OK

A budget screen will be opened that contains a summary budget on the left side and a window to allow you to change the monthly amounts at the right. (If the “Show category groups” box is checked, click off the check mark to eliminate the discretionary/non-discretionary labels and sorting.) The budget summary lists categories down the left side (much like the cash flow statement) with income items shown. The budget amount for a given time period (for example, $1,850 this month for Salary) is given. To view the annual total rather than the quarterly total, choose “yearly” from the Totals menu at the bottom of the screen.

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At the right of the screen, you can change the monthly amount for the item that is selected at the left (here, Government Payments):

Let's say that the Londons have a few items that they expect to be significantly

different this year and want to edit those amounts:

1. Government payments are currently budgeted for March. The Londons expect government payments to be split between March and December so they want to budget government payments at $1,100 in March and $2,000 in December. Highlight Government Payments, click on the appropriate month, enter the new numbers and click on Apply (button at top right of column). Note that the totals are automatically updated.

2. Jack has taken a part time job and expects to earn $1000 each month. The job that

Julie took in April of last year is year-round so her monthly salary needs to be added to January, February, and March. Their salaries combined are $2,850 per month. Move the cursor to the Salary row at the bottom of the Income section, then update the amount to 2,850 in each month and click on Apply.

Now, click on the Expenses tab at the top left of the screen.

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3. Jack and Julie underestimated fuel expenses last year so, to be on the safe side,

they want to budget even more for fuel expenses in the coming year. Click on the Gas, Fuel, & Oil line. For January and February, the amount should be $130. Other fuel expense entries should be: March, 210; April, 120; May, 60; June, 3350; July, 2280; August, 560; September, 910; October, 60; November, 60 and December, 100. Enter these numbers in the appropriate cells.

Continue to edit items in the budget to reflect your planning assumptions for the year. Make the changes to each category line, clicking on Apply after the monthly detail is updated.

Click on the Summary tab at the top left of the Budget window. You’ll now see a summary of your anticipated income and expenses for the coming year by month.

The note at the top alerts us that we may have to use savings or draw on a line of credit to cover expenses in some months this coming year.

Note: If you have a printer, you can print the budget by clicking on Print in the budget window.

Once you have created and saved a personal monthly budget, it can be used in a

comparison with year-to-date income and expenses. (At home, you must develop a

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budget in your file before you can compare it to your actual transactions.) Choose:

Reports (from the Budgeting menu line) Monthly Budget (Or from the main menu line, choose Reports, Cash Flow, Monthly Budget.) From the pull down menu at the top of the page select:

Date Range Custom Date

Custom Date from: 1/1/2003 to: 2/28/2003 Click on OK

This report can be used to see whether expected income and expenses are being realized. Scroll through the report to compare actual income (inflows) and expenses (outflows) to budgeted amounts by studying the Difference column. If income is below budget or expenses are above budget, changes in management may be needed to avoid financial problems.

To look at a graphical presentation of budget variances, click on the Graph tab at

the top right of the report. The blue bars above the zero line shows favorable variances (net income is higher than expected, because cash inflows are above budgeted amounts or cash expenses are below budgeted amounts). Point at one of the bars and you’ll see that a magnifying glass appears, meaning you can zoom in on the transactions that support the graph. Double click on the bar and you’ll get a report listing the transactions for the month. To return to the original graph, select it from the Sub-Reports sidebar. Click on the X in the upper right corner to exit.

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London Monthly Budget 1/1/2002 Through 3/31/2002 Using London Budget

11/22/2002 Page 1 1/1/2003 - 1/31/2003 2/1/2003 - 2/28/2003 1/1/2003 - 2/28/2003 Category Description Actual Budget Difference Actual Budget Difference Actual Budget Difference INFLOWS Div Income 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Government Payments 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Int Inc 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Other Inc 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Raised Sales 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Grain 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Livestock 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 TOTAL Raised Sales 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Salary 2,769.21 2,850.00 -80.79 2,769.21 2,850.00 -80.79 5,538.42 5,700.00 -161.58 TOTAL INFLOWS 2,769.21 2,850.00 -80.79 2,769.21 2,850.00 -80.79 5,538.42 5,700.00 -161.58 OUTFLOWS Auto 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Service 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 TOTAL Auto 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Bank Chrg 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Charity 30.00 140.00 110.00 0.00 90.00 90.00 30.00 230.00 200.00 Christmas 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Clothing 0.00 30.00 30.00 0.00 50.00 50.00 0.00 80.00 80.00 Consultants 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Dining 0.00 20.00 20.00 0.00 20.00 20.00 0.00 40.00 40.00 Dues 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Farm Dues 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 TOTAL Dues 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Entertain 0.00 20.00 20.00 0.00 20.00 20.00 0.00 40.00 40.00 Feed Purchased 0.00 900.00 900.00 0.00 0.00 0.00 0.00 900.00 900.00 Fertilizer & Lime 0.00 0.00 0.00 0.00 6,180.00 6,180.00 0.00 6,180.00 6,180.00 Freight and Trucking 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Gas, Fuel, & Oil 0.00 130.00 130.00 0.00 130.00 130.00 0.00 260.00 260.00 Gifts 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Groceries 44.12 320.00 275.88 0.00 130.00 130.00 44.12 450.00 405.88 Home Rpair 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Household 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Insurance 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Farm Insurance 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 TOTAL Insurance 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Interest Expense 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Farm Interest Other 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 TOTAL Interest Expense 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00

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London Monthly Budget 1/1/2002 Through 3/31/2002 Using London Budget

11/22/2002 Page 1 1/1/2003 - 1/31/2003 2/1/2003 - 2/28/2003 1/1/2003 - 2/28/2003 Category Description Actual Budget Difference Actual Budget Difference Actual Budget Difference Labor Hired 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Medical 0.00 70.00 70.00 0.00 0.00 0.00 0.00 70.00 70.00 Misc 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Mortgage Interest 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Other Expenses 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Farm Expenses Other 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 TOTAL Other Expenses 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Recreation 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Rent Land 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 TOTAL Rent 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Repairs and Maintenance 0.00 70.00 70.00 0.00 20.00 20.00 0.00 90.00 90.00 Subscriptions 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Taxes 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Fed 261.00 0.00 -261.00 261.00 0.00 -261.00 522.00 0.00 -522.00 FICA 171.69 0.00 -171.69 171.69 0.00 -171.69 343.38 0.00 -343.38 Other 40.14 0.00 -40.14 40.14 0.00 -40.14 80.28 0.00 -80.28 State 77.55 0.00 -77.55 77.55 0.00 -77.55 155.10 0.00 -155.10 TOTAL Taxes 550.38 0.00 -550.38 550.38 0.00 -550.38 1,100.76 0.00 -1,100.76 Telephone 76.10 0.00 -76.10 155.77 100.00 -55.77 231.87 100.00 -131.87 Utilities 88.11 60.00 -28.11 125.00 120.00 -5.00 213.11 180.00 -33.11 Veterinary 0.00 0.00 0.00 0.00 510.00 510.00 0.00 510.00 510.00 TOTAL OUTFLOWS 788.71 1,760.00 971.29 831.15 7,370.00 6,538.85 1,619.86 9,130.00 7,510.14 OVERALL TOTAL 1,980.50 1,090.00 890.50 1,938.06 -4,520.00 6,458.06 3,918.56 -3,430.00 7,348.56

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Using Quicken for Financial Planning Quicken Deluxe has a number of handy features that facilitate financial planning.

From the menu line at the top of the screen, choose: Planning Financial Calculators You will see the following calculators listed: Retirement, College, Refinance, Savings, and Loan. Retirement Calculator In the Retirement Calculator, you choose between calculating: • current savings needed to have a certain level of income at retirement, • annual contribution to savings needed to achieve a certain level of income, and • the expected annual retirement income given current savings and expected annual

contributions. Information that is required includes the annual yield on savings, current age of the candidate for retirement, retirement age, age at which withdrawals will stop, other income (social security, etc.), whether the investment is tax-sheltered or not, current and retirement tax rates, and inflation rates.

Julie London is 45 and her husband, Jack, is 48. Their children are now (mostly) self-supporting. Julie and Jack have started to wonder whether they are adequately preparing for retirement. Julie is a teacher and Jack manages their family farm. They have $16,000 in a savings account and expect to be able to add $4,000 to their savings each year. Their non-tax sheltered investments yield an average of 8% per year and economists expect inflation to continue at a modest 3% annually. From the register, choose:

Planning Financial Calculators Retirement Calculator

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Let’s calculate Julie’s expected retirement income. Select Annual Retirement Income at the center right of the screen. Enter:

Click on Calculate.

Expected annual income after taxes in this scenario is a meager $5,785.21. What if they

are able to double their annual contribution to $8,000 ($4,000 each)? What does that mean for annual income after retirement? It increases to $9,991.91 each, still not a very comfortable level of support. The moral of the story is save early and save often!

In the above analysis we focused solely on the cash savings. If the family farm is paid for and is sold at retirement (not given to children), some portion of the value could be included in savings. Let’s assume that Julie’s half of the owned farm assets are expected to generate $200,000 when sold after taxes are paid. This time we will focus solely on the earnings from the farm assets at retirement. Again, select Annual Retirement Income at the bottom left of the screen.

Enter:

Click on Calculate.

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Thus, Jill’s portion of the farm assets if sold at retirement and invested in an alternative earning 8% annually will generate about $12,586.58 in annual income. Click on Done. College Calculator Jamie is 13 and plans to attend college (OSU, of course) where tuition currently averages $2,000 per semester. She will study hard and graduate in 4 years. Since she's a smart girl, she knows that she should start saving money now for her college expenses. She wants to know how much she and her parents need to save each year. From the register, choose:

Planning Financial Calculators College Calculator

In the College Calculator window, select the calculation that you want to make at the bottom right of the screen. In this case, it is the Annual Contribution. Enter:

Click on Calculate. It appears that Jamie and her family will need to save $2,078.88 per year if they want to pay the tuition for Jamie to attend college. Click on Schedule to see the deposit schedule. Click on Close to return to the College Calculator. Click on Done to leave the College Calculator.

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Refinance Calculator

Interest rates moved lower in recent months and Jack and Julie are wondering whether they should refinance the house they bought 5 years ago. From the menu, choose: Planning Financial Calculators Refinance Calculators Enter the necessary information:

Click on Calculate. The refinance analysis indicates that approximately 21 months are needed to recoup the

refinancing costs and break even. Monthly principal and interest payments are $355.07 and total closing costs are $4,200. If the family plans to remain in the house at least this long, then refinancing looks like a good deal. Click on Done to leave the Refinance Calculator.

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Investment Savings Calculator

Your family wants to be able to pay $100,000 cash for another combine in 6 years. You currently have $4,000 in savings. How much do you need to save each year to meet this goal if savings are earning 5% interest? From the main menu bar, choose: Planning Financial Calculators Savings Calculator Use the mouse to select the calculation that you want to make at the bottom left corner of the Investment Savings Calculator. In this case, it is the Regular Contribution so click on: • Regular Contribution (it's near the bottom right corner of the Investment

Savings Calculator window) Then enter: Click on Calculate.

The Quicken calculator indicates that $17,814.33 per year must be saved to meet this goal. Click on Schedule to see the deposit schedule. Click on Close to return to the Investment Savings Calculator. Click on Done to leave the Savings Calculator.

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Loan Calculator The loan calculator allows you to estimate either a loan amount (given an interest rate, number of years, periods per year, compounding periods, and payments per period) or payment per period (given a loan amount, interest rate, number of years, compounding periods, and periods per year). Choose: Planning Financial Calculators

Loan Calculator

Look at the bottom of the Loan Calculator screen. When the circle is darkened next to "Payment Per Period", Quicken calculates the regular payments for a loan of a given amount based on your entries for the principal amount, annual interest rate, number of years the loan will be repaid, compounding periods, and the number of payments per year. For instance, let's say that you are considering purchasing a new truck. The truck that you have chosen, a new four-wheel drive, has a sticker price of $23,500, but you talk the salesman down to $21,000. You have saved $2,000 to be used for a down payment so you need to borrow $19,000. The loan will be for 5 years at 8.0% interest with monthly payments. Enter the following information:

The anticipated Payment Per Period is $385.25 monthly. You can see how much of your total payment is principal and how much is interest in a given year by clicking on Schedule to display the payment schedule. To leave the schedule, click on Close.

A different question that can also be answered with Quicken's loan calculator is "How much can you afford to pay for a new truck?" If you know how much you have available for regular payments, the loan calculator can also be used to solve for the amount you could afford. Let's say that you have around $300 per month to apply toward the purchase of a new truck. The

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expected interest rate is 8.0%. At the loan calculator screen, you will want to calculate the Loan Amount instead of the payment, so click on: Calculate for • Loan Amount (at the bottom left of the Loan Calculator screen)

Click on Calculate. The maximum principal amount that can be borrowed with these repayment terms is approximately $14,796. To leave the loan calculator, click on Done.

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Various Topics (Quicken 2003 for Windows) Line of Credit/Credit Card Accounts and Alerts A line of credit or short-term operating note is often best tracked using a credit card account. Money can be transferred into checking and payments made as money becomes available. You can also set alerts to warn you when you are approaching the account limit. To set up a line of credit note, choose:

Tools Account List Add Account (in top middle of “Account List” window). •Credit Card Click on Next.

Credit Card Account Setup Account Name (required): Line of credit Financial Institution (required): 1st National Bank Description (optional):

Click on Next. Quicken doesn’t recognize this financial institution •Or tell Quicken to use the name you entered Enter the ending date and balance from your loan statement, if you have it.

Statement Date: 7/1/03 Balance Due: 75,632.24

Click on Next. If you want, enter the credit limit for this account: Credit Limit, if Applicable: 100,000 Click on Done. To have Quicken Deluxe warn when you are approaching your credit limit, go to: Tools Set Up Alerts

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Click on the plus sign at the left of Cash Flow to expand the list of options. At right, enter the “Remind me at value”.

Click on Apply

If you exceed your alert limit or account limit, a pop up alert will appear. Click on Done Recording the transfer of funds into the checking account from the line of credit is easy. Open the Line of Credit account and click on Transfer (top left corner of the register screen). If $20,000 is advanced, enter:

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Click on OK.

This account can be reconciled with a loan statement just as the checking account can be reconciled with the bank statement. Information which will be needed from the loan statement includes charges and cash advances, payments and credits to the account, and the ending balance. Saving and Locating Information for 1099s

One means of noting that a transaction may contribute to the need for a tax form 1099 is to type 1099 on the memo line in appropriate transactions in the check register. You can then generate reports that list or summarize all transactions with this note in the memo line. Go to the account list (Tools, Account List) and select Checking to get into the checking account register. For instance, let's say that you write check number 3267 on June 12 for $628.13 to Joe Bob Baling for custom baling of your alfalfa hay. The current entry would be:

Date: 06/12/03 Num: 3267 Payee: Joe Bob Baling Payment: 628.13 Category: Custom Hire/Alfalfa Memo: 1099

Click on Enter.

Future payments should follow the same format with the payee spelled exactly the same

and 1099 entered in the memo line, this allows Quicken to recognize transactions as a match when filtered reports are developed. At the end of the year when you want to know how much you've spent with a specific payee where 1099 is in the memo field, you simply develop a filtered cash flow report summarized by payee to show the amount. To generate the report, choose:

Reports Cash Flow

Cash Flow

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Click on Customize (top right of screen), change the title of the report and select Payee

for the Row heading:

Click on the Categories tab. In the Matching column at the right, enter 1099 in Memo

Contains:

The report will pick up any memo notations that include 1099, so thoroughly check the report. Click on OK To memorize the report, click on Save Report.

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Click on OK. You can then re-create the report easily by selecting Reports, Saved Reports and Graphs, 1099 Report.

Recording Futures Market Transactions Options An option allows a producer to pay a premium for a type of commodity price “insurance”. Many producers use “put” options to provide a floor price for their stocker cattle. For example, let’s say you have 75 head of stocker steers anticipated to weigh approximately 650 pounds in May and want to insure a $70 floor price for their May sale. A feeder cattle contract is 50,000 pounds or 500 cwt, so one contract could protect the price for your 75 steers. You call a broker and purchase a $70 May feeder cattle put option for $1.20/cwt premium. The cost of the option purchase would be $600 ($1.20 x 500 cwt) plus a commission, say $75. To record this “put” option purchase, first add a category for marketing expenses (Marketing Expense) to your category list. To create the category, select Tools, Category List (or press Ctrl+C). Click on New, and then enter:

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Click on OK. If you want to track commission expenses separately from the option expense, you will need to add a new category for commissions. When finished adding categories, close the Category list. To record the purchase of the “put” using funds from the checking account, go to the Checking register and enter:

Date: 1/7/03 Num: 3456 Payee: ABC Brokerage Payment: 675 Category: Marketing Expense/Stocker Memo: $70 Put @ $1.20 for 500 cwt

Click on Enter. Often your option will expire without any value. However, if you realize any income from the option, you would create a marketing income (Marketing Income) category similar to the marketing expense category. This income will be tax-related and should be linked to the tax form and line, Schedule F: Other Farm Income. You would then make the appropriate deposit entry. For example, in May, feeder cattle are trading at $68 and your $70 put is now worth $2/cwt or $1,000. You would sell your put and enter the deposit in the newly created Marketing Income category.

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Date: 5/6/03 Num: DEP Payee: ABC Brokerage Deposit: 1000 (be sure to erase the automatic value of $675.00) Cat: Marketing Income Memo: Settlement of put option

Click on Enter.

Hedges Hedges can be a bit more complicated to record because daily changes in market prices may also affect the margin money required for the trade. For a hedge, add categories similar to those in the option trade, for example, Margin Income and Margin Expense categories. Enter your realized gain or loss after you have offset your hedged position in Margin Income or Margin Expense categories as appropriate.

Scheduled Transactions

In this section, we will again use the LOND03 file, so choose:

File Open (or press Ctrl+O)

Open Quicken File

Look in: [C:Workshop Files] and highlight LOND03

Click on OK. If you want to be reminded of due dates for monthly bills, you can set up one or more

scheduled transactions. For example, each month you get utility and cable television bills which are due on the first of the month. There are several ways that you can set up a scheduled transaction for a payment that has not been previously entered in the register. Choose:

Cash Flow Scheduled Transaction List (or press Ctrl+J) Create New Payment

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Click on OK. You may receive a message about Quicken automatically entering the transaction or prompting you to enter the transaction. Click on OK.

Repeat the process for other scheduled transactions. If you turn on the computer any time within five days of the date on which the bills are due, you will be reminded that you have bills to pay.

Note: If you have set up a budget and your scheduled transaction will exceed your

budgeted amount, you may receive this message:

Another way to set up a scheduled transaction is to choose the Cash Flow Center. In the

Bills and Scheduled Transactions window, click on Add a Transaction at the bottom of the screen. Enter the information and click on OK.

Writing Checks with Quicken

Quicken acts as a register for transactions, and also allows you to write and print checks from the computer (with the appropriate paper form). The check-writing feature allows you to “write” the check as well as complete the memo, category, and class. Choose:

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Cash Flow Write Checks

Enter the date, payee, dollar amount (written amount fills in automatically), address (optional), and memo. The category is entered below the check and, as in the register entry; the transaction can be split by clicking on the Split button or pressing Ctrl+S. Click on the button Record Check to enter the transaction in the register. The checks are listed with Print in the NUM field until they are printed. To specify the appropriate printer settings choose: File, Printer Setup, For Printing Checks.

Note: If you are not actually printing checks using Quicken but would prefer to use this view to enter data, you can later enter the check number in the register. Entering the check number removes the check from the checks to be printed list.

Year End Copy: Archive vs. Start New Year At the beginning of the year or when files start getting big, people wonder how they should copy, store or otherwise manage their files. In Quicken, choices under file operations for year-end copies include “start new year” and “archive”. The archiving process copies the previous year’s transactions to a separate file. The current file will still contain all transactions, including last year’s entries. Archiving is similar to making a backup copy of data for last year (and earlier) in the current file under a different name. Since all transactions remain in the current file, you can continue to create reports and graphs that include all historical data.

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Let’s say that you’ve been entering financial records in Quicken since 1998 in a file called FARM. Now you want to archive the data prior to 2003. Choose: File File Operations Year-End Copy

Click on OK

Note: The archive default date is December 31 of the previous calendar year. You can choose a different date by clicking on the calendar or typing in a date.

Click on OK. You will receive a message that the file has been copied successfully and will be prompted to choose whether you want to use the current file or the archived file. Choose the current file if you want access to all data including transactions entered in 2002. Click on OK. The other alternative, Start New Year, saves a copy of the current file, while recreating the file you have been using which now contains only the data from the date you set forward.

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You aren’t “losing” any data entered—past years’ data is in the copy of the current file—you are simply making a file with transactions for the new year (plus any uncleared transactions from the previous year) and all investment transactions. If you don’t reconcile your accounts with bank and credit card statements, this feature doesn’t work well as uncleared transactions remain in the current file. Start New Year is recommended only if data files are getting so large that regular backups are inconvenient. Maintaining several years of data in a file allows you to develop year-to-year comparison reports which can be useful for management and decision-making. To get to Start New Year, choose File, File Operations, Year-End Copy, Start New Year, OK.

Click on OK. Select File for New Year and click on OK. In summary: • With “archive”, you retain access to more than one year of data. • With “start new year”, the current file will be reduced to transactions for this year (plus

uncleared transactions and all investment transactions).

Category Clean up Have you checked your category list lately? You may need to “clean it up” or eliminate unused categories and be sure that there is no duplication so that your reports are clear and meaningful. One way to determine the categories used is to print a cash flow statement with the categories as rows. With your Quicken file open, choose: Reports Spending Cash Flow and customize the dates to Include all dates.

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Print the report and have it at hand while you view the category list on screen (choose Tools, Category List or press Ctrl+C). Delete any categories in the list that do not appear in the printed Cash Flow report. Highlight the category, and then click on: Delete

• Delete Category OK

Note: If an unused category contains subcategories, the subcategories must be deleted before the main category can be eliminated.

You may discover that you have two (or more) similar names that should be combined. For instance, you may have Interest Expense and Interest Paid categories when only one is needed. Let’s say that you want to combine the Interest Paid category with Interest Expense. Highlight Interest Paid in the category list and click on Delete. Then, select Replace Category and scroll through the list to select Interest Expense (be sure that you don’t select an interest category in the income section), and then click on OK. All transactions that contained the category Interest Paid will now be Interest Expense.

Checking your category list is sort of like spring (or fall) cleaning. It’s not something you enjoy doing, but it does provide benefits in the long run. If your category list is in order, you will have fewer corrections and changes to make when you want to print a cash flow statement for a lender or work on a budget for the coming year.

Retrieving a Deleted Quicken File

Whoops! If a Quicken data file is accidentally deleted and a backup file is not available on floppy disk, a copy may be restored from the QUICKENW\BACKUP directory. Quicken automatically saves a backup copy of your working data file every week (a good reason for recording data on a consistent weekly basis). To retrieve the backup file, click on File, Open, and select the QUICKENW folder (directory) or the folder (directory) where your file is saved. In the list will be the subdirectory or folder named BACKUP. Double click on BACKUP and then choose the data file name with a 1 (for example, farming1.qdf). That is the most current of the five backup copies that Quicken maintains. It is important to remember that this is not a reliable backup method. This type of backup will be useless if the computer hardware is destroyed. The backups will be more random since the automatic backup is initiated when the computer is turned on and Quicken is used.